UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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☐ | Soliciting Material Pursuant toSection 240.14a-12 |
SLM Corporation
(Name of Registrant as Specified In Its Charter)
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300 Continental Drive Newark, Delaware 19713 |
LETTER FROM THE CHIEF EXECUTIVE OFFICERCHAIRMAN
OF THE BOARD OF DIRECTORS
May 3, 20195, 2020
Dear Fellow Stockholders:
As the premier brand for college and continuous education, Sallie Mae builds prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Education is the foundation for success and the proven pathway to economic mobility. We are proud to serve the 456,000 students and families who selected us last year as they invested in their future through education.
This year, like many other organizations, we have needed to change the way we work, socialize, and live our daily lives in the face of theCOVID-19 crisis. Our team has shown an extraordinary adaptability in the face of this ever-changing landscape. In particular, I want to recognize those employees who continue to serve our customers, develop new solutions to ensure the health and safety of our employees, keep our facilities safe, and keep our business running smoothly throughout this global pandemic.
We continue to take tangible actions to position our franchise for long-term success, including focusing our resources on key growth opportunities, providing high-quality private student loans, and offering competitive financing for grad school.
In addition, we remain committed to these values every day of the year: Connect, Thrive, Do Right, Dare to Do, and Make a Difference. Sallie Mae’s efforts to live these values are highlighted in our inaugural Corporate Social Responsibility report that was published in March 2020 and available on our website.
Finally, I am pleased to introduce Jonathan W. Witter, our new Chief Executive Officer. Jon is an industry veteran bringing nearly three decades of executive leadership, banking expertise, and operational management to Sallie Mae. He is a strategic leader with a demonstrated ability to improvetop- and bottom-line performance, while enhancing customer experience. Most recently, he served as Executive Vice President and Chief Customer Officer of Hilton, where he oversaw the company’s global brands, marketing, loyalty and partnerships, IT, and strategy teams. Prior to his role at Hilton, Jon held leadership positions at Capital One, Morgan Stanley, and Wachovia.
Our Board and management team are confident that Jon is ideally suited to lead Sallie Mae, and under his leadership, we will continue to perform and deliver on our long-term growth plans.
Please join us for the SLM Corporation (“Sallie Mae”) 20192020 Annual Meeting of Stockholders (the “Annual Meeting”) on Thursday, June 20, 2019,18, 2020, at 11:00 a.m. Eastern Daylight Time in our corporate headquarters locatedto be held virtually via the Internet at 300 Continental Drive, Newark, Delaware 19713.
Last year, nearly 374,000 students and families trusted Sallie Mae to help them achieve the dream of a higher education. We enter 2019 with significant momentum after another great year highlighted by increased net interest income, growth in our private education loan business, and terrific credit quality. I applaud our more than 1,800 employees and their steadfast commitment to equipping our customers and, more broadly, aspiring minds to achieve the lives they imagine.www.virtualshareholdermeeting.com/SLM2020.
Details of the business to be conducted at the Annual Meeting are provided in the attached Notice of Annual Meeting and proxy statement. You are being asked to vote on a number of important matters. Your vote is important, regardless of the number of shares you own, and all holders of our Common Stock are cordially invited to attend the Annual Meeting in person.Meeting. Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Availability of Proxy Materials or the proxy card you received in the mail.
Thank you for your continued support of Sallie Mae.
Sincerely,
Raymond J. Quinlan
Chairman of the Board of Directors
and Chief Executive Officer
NOTICE OF 20192020 ANNUAL MEETING
OF STOCKHOLDERS
Date | Time | Place | ||
Thursday June | 11:00 a.m. Eastern Daylight Time |
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Items of Business:
Proposal 1—Elect 12 directors nominated by the Sallie Mae Board of Directors (“Board of Directors”), each for aone-year term, to serve until their successors have been duly elected and qualified; |
Proposal 2—Approve, on an advisory basis, Sallie Mae’s executive compensation; |
Proposal 3—Ratify the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the year ending December 31, |
Other Business—Transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. |
Record Date:
Stockholders of record of the Company’s Common Stock, par value $.20 per share (“Common Stock”), as of the close of business on April 23, 2019,21, 2020, will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. On April 23, 2019, 432,269,11821, 2020, 375,096,458 shares of Common Stock were outstanding and eligible to be voted.
How to Vote:
Your participation in the Annual Meeting is important. Sallie Mae urges you to take the time to read carefully the proposals described in the proxy statement and vote your proxy at your earliest convenience.
You may vote one of the following ways:
By Telephone 1-800-690-6903 | ||
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By Internet before the meeting www.proxyvote.com | |
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By Mail completing and signing the proxy card enclosed and returning it in the envelope provided | |
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By order of the Board of Directors
Richard M. Nelson
Corporate Secretary
May 3, 20195, 2020
TABLEOF CONTENTS
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PROPOSAL 3—Ratification of the Appointment of the Independent Registered Public Accounting Firm | 11 | |||
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Ownership of Common Stock by Directors and Executive Officers | ||||
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Other Arrangements, Policies and Practices Related to Executive Compensation Programs | ||||
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Non-Qualified Deferred Compensation for Fiscal Year | ||||
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20192020 Proxy Statement —SLM CORPORATION
300 Continental Drive
Newark, Delaware 19713
The Board of Directors of SLM Corporation (“Sallie Mae,” the “Company,” “we,” “our” or “us”) is furnishing this proxy statement to solicit proxies for use at Sallie Mae’s 20192020 Annual Meeting of Stockholders (the “Annual Meeting”). A copy of the Notice of the Annual Meeting accompanies this proxy statement. This proxy statement is being sent or made available, as applicable, to our stockholders beginning on or about May 3, 2019.5, 2020. In light of the coronavirus(COVID-19), for the safety and well-being of our stockholders, and taking into account the protocols of local, state and federal governments, we have determined that the Annual Meeting will be held in a virtual meeting format only (with noin-person meeting), via the Internet, atwww.virtualshareholdermeeting.com/SLM2020. For more information regarding the Annual Meeting process, please review the section entitled “Questions and Answers About the Annual Meeting and Voting” contained at the end of this proxy statement.
The proxy statement and Sallie Mae’s Annual Report on Form10-K for the year ended December 31, 20182019 (the “2018“2019 Form10-K”) are available atat:https://www.salliemae.com/investors/shareholder-information andhttps://materials.proxyvote.com. You may also obtain these materials at the Securities and Exchange Commission (“SEC”) website atwww.sec.gov or by contacting the Office of the Corporate Secretary at the Company’s principal executive offices, located at 300 Continental Drive, Newark, Delaware 19713. Sallie Mae will provide a copy of the 20182019 Form10-K without charge to any stockholder upon written request.
This proxy statement contains three proposals requiring stockholder action, each of which is discussed in more detail below. Proposal 1 seeks the election of 12 directors nominated by the Board of Directors. Proposal 2 seeks approval, on an advisory basis, of Sallie Mae’s executive compensation. Proposal 3 seeks ratification of the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2019.2020. Each share of Common Stock is entitled to one vote on each proposal or, in the case of the election of directors, on each nominee.
20192020 Proxy Statement —SLM CORPORATION 1
PROPOSAL 1—ELECTIONOF DIRECTORS
PROPOSAL 1—ELECTION OF DIRECTORS
The Sallie Mae Board of Directors has nominated and recommends 12 individuals for election to our Board of Directors at the Annual Meeting. These individuals are as follows:
Paul G. Child
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Marianne M. Keler |
Frank C. Puleo |
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Mary Carter Warren Franke
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Mark L. Lavelle
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Earl A. Goode
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Jim Matheson
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Kirsten O. Wolberg
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Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under ourBy-Laws, the Board of Directors has the authority to determine the size of the Board of Directors within that range and to fill any vacancies that may arise prior to the next annual meeting of stockholders. The Board of Directors has set the number of members at 12.
Biographical information, qualifications, and experience with respect to each director nominee appear below. In addition to fulfilling the general criteria for director nominees described in the section titled “Nominations Process,” each nominee possesses experience, skills, attributes, and other qualifications the Board of Directors has determined support its oversight and management of Sallie Mae’s business, operations, and structure. These qualifications are discussed below, along with biographical information regarding each director nominee, including each individual’s age, principal occupation, and business experience during the past five years. Information concerning each director nominee is based in part on information received from the respective director nominee and in part from Sallie Mae’s records.
All nominees appearing below have consented to being named in this proxy statement and to serve if elected. Should any nominee subsequently decline or be unable to accept such nomination to serve as a director, the Board of Directors may designate a substitute nominee or the persons voting the shares represented by proxies solicited hereby may vote such shares for a reduced number of nominees. If the Board of Directors designates a substitute nominee, persons named as proxies will vote“FOR” that substitute nominee.
OurBy-Laws provide the election of a director in an uncontested election will be by a majority of the votes cast with respect to a nominee at a meeting for the election of directors at which a quorum is present. Each share of Common Stock is entitled to one vote for each nominee. A director nominee will be elected to the Board of Directors if the number of shares voted“FOR” the nominee exceeds the number of votes cast“AGAINST” the nominee’s election. Abstentions and shares not voted on the proposal, including brokernon-votes, are of no effect.
If any director nominee fails to receive a majority of the votes cast“FOR” his or her election, such nominee will automatically tender his or her resignation upon certification of the election results. The Nominations, Governance and Compensation Committee (the “NGC Committee”) of the Board of Directors will make a recommendation to the Board of Directors on whether to accept or reject such nominee’s resignation. The Board of Directors will act on the NGC Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of certification of the election results.
2 SLM CORPORATION —20192020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
PAUL G. CHILD Former Office Managing Partner, Salt Lake City, Deloitte LLP (Independent) (Lead Director) |
Professional Highlights:
• Office Managing Partner, Salt Lake City, Deloitte LLP—1995 to 2008; Professional Practice Director, Salt Lake City—1989 to 1995; Audit Partner—1983 to 2008; various positions—1971 to 1983
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2009 to present • Member, Board of Governors, Salt Lake Chamber of Commerce—2002 to 2008 • Director, Mountainwest Capital Network—2002 to 2008 • Director, United Way of Greater Salt Lake—2001 to 2008 |
Qualifications: Mr. Child’s leadership roles and experience in the accounting field enable him to bring to the Board of Directors experience in the areas of finance, accounting, financial services, and capital markets.
Age:
Director since:April 2014 | ||||||||
MARY CARTER WARREN FRANKE Former Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co. (Independent) |
Professional Highlights:
• Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co.—2007 to 2013 • Executive Vice President and Chief Marketing Officer, Chase Card Services—1995 to 2007
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2014 to present • Director, The Warfield Fund—2007 to present • Director, Saint Mary’s School—2014 to present • Director, Hobe Sound Community Chest—2017 to present • Director, Paul’s Place—2014 to 2017 |
Qualifications: Ms. Franke’s leadership roles and experience in marketing and the banking industry enable her to contribute to the Board of Directors experience in the areas of marketing, business development, and financial services.
Age:
Director since:April 2014 |
20192020 Proxy Statement —SLM CORPORATION 3
PROPOSAL 1—ELECTIONOF DIRECTORS
EARL A. GOODE Chief of Staff to the Governor of Indiana (Independent) (Strategic Planning CommitteeCo-Char) |
Professional Highlights:
• Chief of Staff to the Governor of Indiana—2006 to 2013; 2017 to present • President, Indianapolis Capital Improvement Board of Managers—2015 to 2016 • Deputy Chief of Staff to the Governor of Indiana—2006 • Commissioner, Department of Administration, State of Indiana—2005 to 2006 • Chairman, Indiana Sports Corporation—2001 to 2006 • President, GTE Information Services and GTE Directories Company—1994 to 2000; President, GTE Telephone Operations North and East—1990 to 1994; President, GTE Telephone Company of the Southwest—1988 to 1990
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2013 to present • Member and Former Chairman, Georgetown College Board of Trustees—2006 to present • • Member and Executive Committee, |
Qualifications: Mr. Goode has held several leadership positions in business services and operations. This experience, combined with his involvement in the state political process, enables him to contribute to the Board of Directors in the areas of marketing and product development, business operations, and political and government affairs.
Age:
Director since:July 2000 |
4 SLM CORPORATION —20192020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
MARIANNE M. KELER Attorney, Keler & Kershow PLLC (Independent) (Audit Committee Chair) |
Professional Highlights:
• Attorney, Keler & Kershow PLLC—2006 to present • Executive Vice President, Consumer Finance, Corporate Strategy & Administration, Sallie Mae—2004 to 2006 • Senior Vice President & General Counsel, Sallie Mae; President, Student Loan Marketing Association—1997 to 2004 • Vice President & Associate General Counsel, Student Loan Marketing Association—1990 to 1997; various other positions—1985 to 1997
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2010 to present • Board Chair, Building Hope (charter school lender)—2004 to present • Board Chair, Institute for American Universities—2018 to present • Finance Committee Chair, Institute for American Universities—2008 to 2016; • Board Chair, American University in • Member, Georgetown University Board of Regents—2009 to 2015 • Founding Director, National Student Clearinghouse—1993 to 2009
Directorship of other public companies:
• CubeSmart (NYSE: CUBE)—2007 to present; Board Chair— 2018 to present |
Qualifications: Ms. Keler’s legal background and experience in the student loan industry and with Sallie Mae bring valuable perspective to the Board of Directors in the areas of student and consumer lending, legal and corporate governance, and higher education.
Age:
Director since:April 2014 | ||||||||
MARK L. LAVELLE Former Senior Vice President, Commerce Cloud, Adobe Inc. (Independent) |
Professional Highlights:
• Senior Vice President, Commerce Cloud, Adobe Inc.—2018 to • Chief Executive Officer, Magento Commerce—2015 to 2018 • Senior Vice President, Product, eBay Enterprise 2013 to 2015 • Senior Vice President, Strategy and Partnerships, eBay, Inc.—2012 to 2013 • Senior Vice President, Strategy and Business Development, PayPal, Inc.—2009 to 2012 • Co-Founder and Vice President, Corporate Development, Bill Me Later, Inc.—2001 to 2009
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2019 to present • Director, Armada Inc—2018 to present • Director, Second Chance—2008 to present |
Qualifications: Mr. Lavelle’s extensive experience developing and scaling businesses encompassing financial services, commerce, and information technology allows him to provide valuable insight to the Board of Directors in the areas of risk management, strategy, acquisitions, and business operations.
Age:
Director since:April 2019 |
20192020 Proxy Statement —SLM CORPORATION 5
PROPOSAL 1—ELECTIONOF DIRECTORS
JIM MATHESON Chief Executive Officer, NRECA (Independent) |
Professional Highlights:
• Chief Executive Officer, National Rural Electric Cooperative Association—2016 to present • Principal in the Public Policy Practice, Squire Patton Boggs—2015 to 2016 • Member of the United States House of Representatives—2001 to 2015 • Founder of The Matheson Group—1999 to 2000 • Consultant, Energy Strategies, Inc.—1991 to 1998
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2015 to present • Service on the United States House of Representatives Energy and Commerce Committee—2007 to 2015; Science Committee—2001 to 2011; Financial Services Committee—2003 to 2007; and Transportation and Infrastructure Committee—2001 to 2007 • Chief Deputy Whip for the Democratic Caucus of the United States House of Representatives—2011 to 2015 • Board Member, United States Association of Former Members of Congress—2015 to present • Director, United States Global Leadership Coalition—2019 to present |
Qualifications:Mr. Matheson’s extensive experience in public policy and financial services enables him to bring to the Board of Directors a valuable perspective in development of business strategies and on public policy and regulatory matters.
Age:
Director since:March 2015 | ||||||||
FRANK C. PULEO Attorney (Independent) (Risk Committee Chair) |
Professional Highlights:
• Attorney—2006 to 2016 • Co-Chair, Global Finance Group, Milbank, Tweed, Hadley & McCloy LLP, a law firm—1995 to 2006; Partner—1978 to 2006
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2013 to present • Director, South Street Securities Holdings Inc. (f/k/a CMET Finance)—2008 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Director, CIFC Corporation—2006 to 2014
Directorships of other public companies:
• Apollo Investment Corporation—2007 to present |
Qualifications: Mr. Puleo’s background as a corporate and finance attorney enables him to bring analytical, legal, and financial insight to the Board of Directors in the areas of financial services, capital markets transactions, and corporate governance.
Age:
Director since:March 2008 |
6 SLM CORPORATION —20192020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
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VIVIAN C. SCHNECK-LAST Former Managing Director, (Independent) |
Professional Highlights:
• Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to 2014 • Managing Director, Global Head of Technology Business Development, Goldman Sachs & Company—2000 to 2014 • Managing Director, Global Head of Technology Vendor Management, Goldman Sachs & Company—2003 to 2014
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2015 to present • • Advisor/ Director, Coronet—2015 to present • Directorships of other public companies: • SCVX—2020 to present |
Qualifications: Ms. Schneck-Last’s strategic technology experience and background in technology governance in the financial services field bring valuable perspective to the Board of Directors in risk management and on a broad range of enterprise technology matters.
Age:
Director since:March 2015 |
2019 Proxy Statement —SLM CORPORATION 7
PROPOSAL 1—ELECTIONOF DIRECTORS
WILLIAM N. SHIEBLER Private Investor (Independent) (NGC Committee Chair) |
Professional Highlights:
• Private Investor—2007 to present • Chief Executive Officer of the Americas, Deutsche Asset Management (Deutsche Bank)—2002 to 2007 • President and Chief Executive Officer, Putnam Mutual Funds; Senior Managing Director, Putnam Investments—1990 to 1999
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2010 to present • Trustee,
Directorships of other public companies:
• Calamos Asset Management, Inc.—2012 to 2017 • OXiGENE, Inc.—2002 to 2012 • MasTec Inc.—2001 to 2004 |
Qualifications: Mr. Shiebler’s extensive experience in the financial services industry and with other public companies allows him to provide valuable insight to the Board of Directors in the areas of finance, portfolio management, and business operations.
Age:
Director since:April 2014 |
2020 Proxy Statement —SLM CORPORATION 7
PROPOSAL 1—ELECTIONOF DIRECTORS
ROBERT S. STRONG Former Managing Director, Chairman, Capital (Independent) (Compliance Committee Chair) (Preferred Stock Committee Chair) |
Professional Highlights:
• Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to 2007 • Managing Director, Portfolio Management, Bank of America Securities—2001 to 2006 • Executive Vice President, Chief Credit Officer, JP Morgan Chase Bank—1996 to 2001
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2014 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Member, Financial Policy Review Board for the State of New Jersey—2013 to 2016 • Director, CamberLink Inc.—2013 to 2016 |
Qualifications: Mr. Strong’s extensive experience in the banking and financial services industries allows him to provide valuable insight to the Board of Directors in the areas of finance, risk management, portfolio management, and business operations.
Age:
Director since:April 2014 | ||||||||
JONATHAN W. WITTER Chief Executive Officer, Sallie Mae (Executive; Not Independent) | Professional Highlights: • Chief Executive Officer and Director, Sallie Mae—April 2020 to present • Executive Vice President and Chief Customer Officer, Hilton Worldwide Holdings—April 2017 to April 2020 • President—Retail and Direct Banking, Capital One Financial Corporation—February 2012 to March 2017 • President—Retail and Small Business Banking, Capital One Financial Corporation—September 2011 to February 2012 • Executive Vice President—Retail Banking, Capital One Financial Corporation—December 2010 to September 2011 • Chief Operating Officer—Retail Banking Group and President, Morgan Stanley Private Bank—2009 to December 2010 • Executive Vice President and Head of General Bank Distribution, Wachovia (now Wells Fargo & Company)—2004 to 2009 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—April 2020 to present | Qualifications: Mr. Witter’s extensive background and significant leadership experience in the banking industry and his customer experience expertise allow him to provide business and leadership insight to the Board of Directors in the areas of banking, financial services, capital markets, business operations and customer service. Age: 50 Director since:April 2020 |
8 SLM CORPORATION —20192020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
KIRSTEN O. WOLBERG Chief Technology and (Independent) |
Professional Highlights:
• Chief Technology and Operations Officer, DocuSign—2017 to present • Vice President, PayPal Separation Executive, PayPal, Inc.—2014 to 2017 • Vice President, Technology, PayPal, Inc.—2012 to 2014 • Chief Information Officer, Salesforce.com—2008 to 2011
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2016 to present • Vice President, Corporate Technology, Charles Schwab & Co.—2001 to 2008 • Director, Year Up—2008 to present • Director, Jewish Vocational Services—2014 to present
Directorships of other public companies:
• Silicon Graphics International Corp.—2016 |
Qualifications: Ms. Wolberg’s extensive experience in information technology for the financial services industry allows her to provide valuable insight to the Board of Directors in the areas of finance, information technology risks, and business operations.
Age:
Director since:November 2016 |
Board of Directors Recommendation
✓ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE ELECTION OF THE TWELVE NOMINEES NAMED ABOVE.
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20192020 Proxy Statement —SLM CORPORATION 9
PROPOSAL 2—ADVISORY VOTEON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Sallie Mae is asking stockholders to approve an advisory resolution (commonly referred to as a“say-on-pay” resolution) on its executive compensation as reported in this proxy statement. Sallie Mae urges stockholders to read the “Compensation Discussion and Analysis” section (“CD&A”) of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of Sallie Mae’s named executive officers (“NEOs”).
At our annual meeting of stockholders held in June 2018,2019, we submitted anon-binding vote to our stockholders to approve our executive compensation. Approximately 92.296.0 percent of the stockholders voted in favor of thesay-on-pay proposal. We attribute that broad support in part to our continued efforts to understand and address the feedback we received from our stockholders. Specifically, we continue to focus on performance-based compensation for our NEOs as we (i) tie a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business, and, (ii) award a greater percentage of the NEO’s long-term incentive plan equity award (“LTIP”) in the form of performance stock units (“PSUs”). In 2018,2019, as part of our plan to increase the percentage of compensation tied to performance, we increased the amount of PSUs awarded to NEOs under the LTIP from 2025 percent to 25 percent. In 2019, we continued this trend by increasing the amount of PSUs awarded to NEOs under the LTIP to 50 percent.
The compensation awarded to our former Chief Executive Officer (“CEO”), Raymond J. Quinlan, and other NEOs for 20182019 recognizes the positive performance of the Company. The NGC Committee is mindful of its responsibility to align executive compensation with the overall performance of the Company, while taking into consideration the need to provide market competitive compensation in order to recruit and retain highly skilled and experienced executives. The CD&A provides a comprehensive discussion and rationale for the 20182019 pay decisions made by the NGC Committee and the correlation to Company performance.
As described in the CD&A, our executive compensation programs are designed to attract, retain, and motivate our NEOs, who are important to our long-term success. Under these programs, we provide our NEOs with appropriate objectives and incentives to achieve our business goals. We believe that our compensation features demonstrate our responsiveness to our stockholders, our commitment to ourpay-for-performance philosophy, and our goal of aligning management’s interests with those of our stockholders to support the creation of long-term value.
The Board of Directors has adopted a policy providing for annual“say-on-pay” advisory votes. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, Sallie Mae is asking stockholders to approve the following advisory resolution at the Annual Meeting:
“Resolved, that Sallie Mae’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis and the related compensation tables and narrative disclosure in this proxy statement.”
This proposal to approve the resolution regarding the compensation of Sallie Mae’s NEOs requires the affirmative vote of the holders of a majority of the Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGC Committee or the Board of Directors. However, the NGC Committee will, as it has done in the past, carefully evaluate the outcome of the vote when considering future executive compensation decisions.
Board of Directors Recommendation
✓ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE RELATED COMPENSATION TABLES AND NARRATIVE DISCLOSURE IN THIS PROXY STATEMENT.
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10 SLM CORPORATION —20192020 Proxy Statement
PROPOSAL 3—RATIFICATIONOFTHE APPOINTMENTOFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Sallie Mae’s independent registered public accounting firm, KPMG LLP (“KPMG”), is selected by the Audit Committee of Sallie Mae’s Board of Directors (the “Audit Committee”). The Audit Committee has engaged KPMG as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2019.2020. Representatives of KPMG are expected to be present at the Annual Meeting, and they will have the opportunity to respond to appropriate questions from stockholders and to make a statement if they desire to do so.
This proposal is put before the stockholders because the Board of Directors believes it is a good corporate governance practice to provide stockholders a vote on ratification of the selection of the independent registered public accounting firm.
For ratification, this proposal will require the affirmative vote of the holders of a majority of the shares of Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the basis for the stockholders’ vote when determining whether to continue the firm’s engagement. Even if the selection of Sallie Mae’s independent registered public accounting firm is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during 20192020 if, in its discretion, it determines such a change would be in the Company’s best interests.
Board of Directors Recommendation
✓ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR”RATIFICATION OF THE APPOINTMENT OF KPMG AS SALLIE MAE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
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20192020 Proxy Statement —SLM CORPORATION 11
CORPORATE GOVERNANCE
Roles and Responsibilities of the Board of Directors
The Board of Directors believes strong corporate governance is critical to achieving Sallie Mae’s performance goals and to maintaining the trust and confidence of investors, employees, regulatory agencies, and other stakeholders.
The primary responsibilities of the Board of Directors are to:
Review Sallie Mae’s long-term strategies and set long-term performance metrics;
Review risks affecting Sallie Mae and its processes for managing those risks, and oversee assignment of various aspects of risk management, compliance, and governance;
Select, evaluate, and compensate the Chief Executive OfficerCEO and our NEOs;
Plan for succession of the Chief Executive OfficerCEO and members of the executive management team;
Review and approve Sallie Mae’s annual business plan and multi-year strategic plan, and periodically review performance against such plans;
Review and approve major transactions and business initiatives;
Through its Audit Committee, select and oversee Sallie Mae’s independent registered public accounting firm;
Recommend director candidates for election by stockholders; and
Evaluate its own effectiveness.
The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the NGC Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published atwww.salliemae.com under “For Investors,” and a written copy may be obtained by contacting the Corporate Secretary atcorporatesecretary@salliemae.comorSLM Corporation, 300 Continental Drive, Newark, DE 19713. The Guidelines, along with Sallie Mae’sBy-Laws, embody the following governance practices, among others:
A majority of the members of the Board of Directors must be independent directors, and all members of the Audit and NGC Committees must be independent.
All directors stand forre-election each year. Directors are elected under a majority vote standard in uncontested elections.
We combinehave historically combined the roles of Chairman of the Board of Directors and Chief Executive Officer.CEO; however, as set forth in greater detail in the Section titled “Board Leadership Structure,” as of April 19, 2020, we have separated the role of Chairman of the Board of Directors from CEO, and anticipate maintaining this separation going forward. We also have a Lead Independent Director elected by the Board of Directors.
Each regularly scheduled Board of Directors meeting concludes with an executive session in which only members of the Board of Directors participate. Each regularly scheduled committee meeting also generally concludes with an executive session presided over by the committee Chair.
We maintain stock ownership and retention guidelines for directors and executive officers.
The Board of Directors and its committees conduct performance reviews annually.
The Board of Directors and its committees may engage their own advisors.
Raymond J. Quinlan servesOn April 19, 2020, in connection with the appointment of Mr. Witter as ourthe Company’s CEO, the Board of Directors adopted a structure separating the Chairman of the Board of Directors and Chief Executive Officer. The Board of Directors believesfrom the CEO, which was initially reported in our Form8-K filed on March 5, 2020. Currently, Mr. Quinlan, is best situated to servethe Company’s former CEO, serves as the Chairman of the Board of Directors based upon his significant consumer banking experience. In addition,(as well as the Board of Directors believes Mr. Quinlan’s combined roles as Chairman of the Board of Directors and Chief Executive Officer position him to identify effectively Sallie Mae’s strategic priorities and lead discussions on the execution of Company strategy. Mr. Quinlan’s industry-specific experience and expertise allow him to direct discussions effectively and focus decision-making on those items most important to Sallie Mae’s overall success.
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To assist in discharging its oversight responsibilities, theMae Bank, our wholly-owned subsidiary (the “Bank”) Board of Directors appoints a Lead Independent Director. Mr. Child currently serves as the Lead Independent Director. The Lead Independent DirectorDirectors) and the Chair of the NGC Committee are responsible for leading the annual performance review of the Chief Executive Officer. In addition, the Lead Independent Director will continue to act as an active liaison between management and Sallie Mae’s independent directors, maintaining frequent contact with bothserve in this role until June 18, 2020, at which time Mr. Quinlan to advise himwill no longer serve on the progress of the Board of Directors’ committee meetings, and with individual independent directors concerning developments affecting the Company. Through the role of an active, engaged Lead Independent Director, the Board of Directors believes its leadership structure is appropriately balanced between promoting Sallie Mae’s strategic development and the Board of Directors’ management oversight function. The Board of Directors also believes its leadership structure has created an environment of open and efficient communication between the Board of Directors, and management, enabling the Board of Directors will appoint one of the Company’s independent directors then in service to maintainserve as the independent Chair of the Board of Directors of the Company, as well as the Chair of the Bank Board of Directors. The Board of Directors believes that, after June 18, 2020, an active, informedindependent director is best situated to serve as Chair of our Board of Directors and of the Bank Board of Directors to serve as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. The Board of Directors believes that the Company is currently best served by separating the role of Chair and CEO, but the Board of Directors, consistent with the Company’s governance guidelines and subject to the Company’sby-laws, reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at a given point in risk managementtime. Our Chairman currently serves, and the independent Chair after June 18, 2020 will serve, as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and shareholders. In addition to our separate Chair and CEO structure, the Board of Directors’ governance guidelines provide for a Lead Independent Director to facilitate coordination of the activities of the Company’s independent directors. This position is currently held by being able to monitorPaul Child, an independent director who serves as our Lead Independent Director as well as a member on three of our committees of the Board of Directors: the Audit, Risk, and manage those matters that may present significant risks to Sallie Mae.Strategic Planning Committees. As Lead Independent Director, Mr. Child also attends all meetings held by our Board of Directors’ other committees. Our Lead Independent Director has historically provided strong independent leadership for the Board of Directors.
For a director to be considered independent, the Board of Directors must determine the director does not have any direct or indirect material relationship with Sallie Mae. The Board of Directors has adopted the Guidelines, which embody the corporate governance principles and practices of the Company. The Guidelines include the standards for determining director independence, which conform to the independence requirements of the NASDAQ Global Select Market (“NASDAQ”) listing standards.
The Board of Directors has determined that all of the individuals who served as a director during 20182019, other than Mr. Quinlan, our former CEO, and all nominees standing for election at the Annual Meeting, other than Mr. Quinlan,Witter, our Chief Executive Officer,current CEO, are independent of Sallie Mae.
Each member of the Board of Directors’ Audit and NGC Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines.
As of December 31, 2018,2019, our Board of Directors consisted of the following:
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Board, Committee, and Annual Meeting Attendance
Our Board of Directors met sixnine times in 2018.2019. Each of the then-serving directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which he or she served. Directors are expected to attend the Annual Meeting, and eleventwelve of twelvethirteen of the then-serving members of the Board of Directors attended the Annual Meeting in June 2018.2019. The only director not in attendance at the Annual Meeting in June 2019 was Jed Pitcher, who did not seekre-election to the Board of Directors at the June 2019 Annual Meeting.
Roles of the Board and Its Committees
The Board of Directors has established the following standing committees to assist in its oversight responsibilities: Audit; NGC; Risk; Strategic Planning; and Preferred Stock. Separately, the Sallie Mae Bank Board of Directors has also established a Compliance Committee. Each committee is governed by a Board-approved written charter, which is evaluated annually and which sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.
All of our committee charters, including the charter for our NGC Committee, are available atwww.salliemae.com under “For Investors, Corporate governance.” Stockholders may obtain a written copy of aany and all committee chartercharters by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, Delaware 19713.19713.
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The following table sets forth the membership and number of meetings held for each committee of the Board of Directors during 2018.as of December 31, 2019. Mr. Witter has not served on any committees since his appointment to the Board of Directors on April 20, 2020.
Audit(1) | Nominations, Governance and Compensation | Risk(2) | Strategic Planning | Preferred Stock | |||||||||||||||||||||
Paul G. Child(1) (2) (l) (L) | * | * | |||||||||||||||||||||||
Mary Carter Warren Franke+(2) (I) | * | * | |||||||||||||||||||||||
Earl A. Goode(1) (I) | * | * | Co-Chair | ||||||||||||||||||||||
Marianne M. Keler++(I) | * | ||||||||||||||||||||||||
Jim Matheson(I) | * | * | |||||||||||||||||||||||
Jed H. Pitcher(1) (2) (I) | Chair | * | * | ||||||||||||||||||||||
Frank C. Puleo+(2) (I) | Chair | * | |||||||||||||||||||||||
Raymond J. Quinlan+(C) | Co-Chair | ||||||||||||||||||||||||
Vivian Schneck-Last(2) (I) | * | * | * | ||||||||||||||||||||||
William N. Shiebler+(1) (I) | Chair | * | * | ||||||||||||||||||||||
Robert S. Strong(1) (2) (I) | * | * | Chair | ||||||||||||||||||||||
Kirsten O. Wolberg(I) | * | * | |||||||||||||||||||||||
Number of Meetings in 2018 | 10 | 7 | 8 | 2 | 1 |
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Audit(1) | Nominations, Governance and Compensation | Risk(2) | Strategic Planning | Preferred Stock | |||||||||||||||||||||
Paul G. Child(1) (2) (l) (L) | * | * | * | ||||||||||||||||||||||
Mary Carter Warren Franke(2) (I) | * | * | * | ||||||||||||||||||||||
Earl A. Goode+(1) (I) | * | Co-Chair | |||||||||||||||||||||||
Marianne M. Keler(1) (I) | Chair | * | * | ||||||||||||||||||||||
Mark L. Lavelle(2) (I) | * | * | * | ||||||||||||||||||||||
Jim Matheson(I) | * | * | |||||||||||||||||||||||
Frank C. Puleo+(2) (I) | Chair | * | |||||||||||||||||||||||
Raymond J. Quinlan+(C) | Co-Chair | ||||||||||||||||||||||||
Vivian Schneck-Last(2) (I) | * | * | * | ||||||||||||||||||||||
William N. Shiebler+(1) (I) | Chair | * | * | ||||||||||||||||||||||
Robert S. Strong++(1) (2) (I) | * | Chair | |||||||||||||||||||||||
Kirsten O. Wolberg(I) | * | * | |||||||||||||||||||||||
Number of Meetings in 2019 | 10 | 12 | 9 | 2 | 1 |
* | Committee Member |
+ | Also serves as a member of the |
++ | Also serves as Chair of the |
(C) | Chairman of the Board of Directors |
(I) | Independent Board Member |
(L) | Lead Independent Director |
(1) | The Board of Directors determined Mr. Child, Mr. Goode, |
(2) | The Board of Directors determined Mr. Child, Ms. Franke, Mr. |
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The Board of Directors and its committees oversee Sallie Mae’s overall strategic direction, including setting risk management philosophy, tolerance and parameters, and establishing procedures for assessing the risks of each business line as well as the risk management practices the management team develops and utilizes. Management escalates to the Board of Directors andand/or its committees any significant departures from established tolerances and parameters and reviews new and emerging risks. Throughout the year, the Board of Directors andand/or its committees dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail with senior management, including risks related to cybersecurity. The primary risk oversight responsibilities of each of the standing committees of the Board of Directors are as follows:
Audit Committee
• review of financial statements and periodic public reports;
• sufficiency of internal controls over financial reporting and disclosure controls;
• engage and communicate with our independent registered public accounting firm; and
• operation of internal audit function, staffing, and work plan. | Nominations, Governance and Compensation Committee
• all compensation and benefits for our
• equity-based compensation plans;
• management’s administration of employee benefit plans;
• management succession planning;
• confirm our incentive compensation practices properly balance risk and reward and do not encourage excessiverisk-taking;
• implement good governance policies and measures for Sallie Mae and our Board of Directors;
• recommend nominees for election to the Board of Directors;
• conduct assessments of the performance of the Board of Directors and its committees; and
• review related party transactions. | Risk Committee
• monitor our major risk categories, including credit, funding and liquidity, market, compliance, legal, operational, reputational and strategic, as well as our risk management capabilities, including those related to financial product safety, information and data security, privacy, crisis preparedness, business continuity, and disaster recovery plans (which responsibilities include oversight of the Company’s cybersecurity risk, profile assessments, and monitoring, as well as review of the Company’s strategy to mitigate cybersecurity risks);
• review, approve, and authorize the terms and conditions of any loan securitization transaction, loan sale, or debt transaction of our Company or our affiliates;
• review our risk management framework and supporting governance structure, roles, and responsibilities established by management;
• facilitate the distribution of risk-related information provided to the Risk Committee across and among the Board of Directors and its other committees, including cybersecurity and other information security issues, risks, and threats; and
• review our risk appetite framework and conduct regular reviews of key risk measures.
| Strategic Planning Committee
• engage the | Preferred Stock Committee
• monitor and evaluate our business activities in light of the rights of holders of the Company’s preferred stock. |
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All members of the Board of Directors also serve as members of the board of directors of
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The NGC Committee considers for nomination to the Board of Directors candidates recommended by stockholders and members of the Board of Directors. The candidates are evaluated based on the needs of the Board of Directors and Sallie Mae at that time. The Board of Directors seeks representation that reflects gender, ethnic, and geographic diversity. The minimum qualifications and attributes the NGC Committee believes a director nominee must possess include:
Knowledge of the business of Sallie Mae;
Proven record of accomplishment;
Willingness to commit the time necessary for Board of Directors service;
Integrity and sound judgment in areas relevant to the business;
Impartiality in representing stockholders;
Ability to challenge and stimulate management; and
Independence.
To recommend a candidate, stockholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chair of the NGC Committee atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.19713. The stockholder should also include his or her contact information and a statement of his or her share ownership. The nomination deadline for the 20192020 Annual Meeting has now closed. A stockholder wishing to nominate a candidate must comply with the notice and other requirements described under “Stockholder Proposals for the 20202021 Annual Meeting” in this proxy statement.
Sallie Mae has a written policy regarding review and approval of related party transactions. Transactions covered by the policy are transactions involving Sallie Mae in excess of $120,000 in any year in which any director, nominee, executive officer, or greater-than-five percent beneficial owner of the Company, or any of their respective immediate family members, has or had a direct or indirect material interest, other than solely as a director and/orless-than-ten percent owner of an entity involved in the transaction (“Related Party Transactions”). Loans made in the ordinary course of Sallie Mae’s business to executive officers, directors, and their family members are considered Related Party Transactions and arepre-approved. Moreover, the Bank has also adopted written policies to implement the requirements of Regulation O of the Board of Governors of the Federal Reserve System, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be, and are, approved by the Board of Directors of the Bank. In 2019, the Company issued a credit card to Mr. Thome with a total of $10,000 of credit extended to him. Such credit card was issued in the ordinary course of business; is on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company; and does not involve more than the normal risk of collectability or present other features unfavorable to the Company. Since January 1, 2019, we have not had any other transactions with related persons required to be disclosed under Item 404(a) of RegulationS-K, and no such transactions are currently proposed.
Under the Related Party Transactions policy, the General Counsel will notify the Chair of the NGC Committee of any proposed Related Party Transaction, and the Chair of the NGC Committee will determine if approval under the policy is required. If required, the NGC Committee will then review the proposed Related Party Transaction and make a recommendation to the Board of Directors regarding whether to approve the transaction. In considering a transaction, the NGC Committee takes into account whether a transaction would be on terms no less favorable than to an unaffiliated third-party under the same or similar circumstances, among other factors.
Environmental, Social and Governance Practices
In conducting our business, we continually pursue practices that we believe will drive sustainable, long-term growth and profitability. Such “environmental, social and governance” or “ESG” practices mean different things to different investors and to the organizations that evaluate and rate ESG practices. For us, ESG practices mean that we embrace the core principles of corporate responsibility and social purpose through everything we do for our customers, employees, communities, and environment. All of ourOur actions are wholly shaped by our mission and purpose—helping families achieve the dream of a higher education. TheAs an application of ESG practices, the Global Reporting Initiative Standards, the
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CORPORATE GOVERNANCE
Sustainability Accounting Standards Board, and the United Nations Sustainable Development Goals (“SDGs”) are often referred to asconsidered a roadmap for corporations to serve the long-term goals of society. These SDGs include SDG4-Quality Education (“SDG 4”), which aims to ensure inclusive and quality education for all. We support the general goals of SDG 4 and agree that education is one of the most powerful and proven vehicles for sustainable development and wedevelopment. We support the goal of universal access to quality higher education, whether it be for a degree program, continuing education, or certificate training.
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At its core, education creates opportunities for individuals to help individuals realize their dreams, succeed, and lead more fulfilling and purposeful lives. Those who attend and graduate from college leavemove forward with a wide range of personal, financial, and other lifelong benefits, including a greater appreciation of andan ability to positively affect the outcomes forof our most significant societal challenges.
ESG at a Glance
We describe some of our key ESG practices in this section, but more details regarding ESG can be found in our inaugural Corporate Social Responsibility Report (“CSR Report”) that was published in March 2020 and available on our website athttp://www.salliemae.com/csr. The CSR Report is not incorporated by reference herein, and is not a part of this proxy statement or the 2019 Form10-K.
Our Customers
As a leader in helping families save, plan, and responsibly paythe premier financial brand for college and continuous education, we provide tools, resources,are in the business of building prosperous futures by providing access, planning outcomes, and financing to produce our country’s future engineers, doctors, nurses, teachers, entrepreneurs, business leaders,helping students and more. Since establishing ourselves as a stand-alone consumer banking business in 2014, more than two million families have trusted Sallie Mae to help them pay for college, more than any other private student lender.
responsibly fund their future. Along with a company-wide commitment to honesty, dependability, and integrity, we are committed to:
Offering our customers a diversified set of fairly priced products;
Increasing our customers’ long-term financial stability;
Treating our customers and partners with respect;
Rewarding successful customer credit management(on-time payment incentive);
Contributing time and resources to improving our community; and
Creating a work environment that enables our employees to fulfillreach their potential.
These commitments form the foundation of our mutual success. It is particularly gratifying that 98 percent of our customers are effectively managing their student loan payments.
Additional Financial Education and Assistance
While each family’s planning and paying for college strategy is unique, we recommend families follow a1-2-3 approach:
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In addition, we are committed to providing tools to helphelping our next generation of well-educated individuals make informed decisions about college. Our College Planning Calculator helps families set college savings goals, projectstheir education. After all, education in all forms is the full costsfoundation for success, an equalizer of opportunities, and a college degree, and estimates future student loan payments and the annual starting salary level neededproven pathway to keep payments manageable.economic mobility.
Scholarship Search, our free online scholarship database, is home to more than 5 million scholarships collectively worth over $24 billion. For academic year 2017-2018, more than 16,000 students reported receiving at least one scholarship via our database, covering more than $49 million in college costs. In addition, we recently launched a scholarship search tool tailored specifically for graduate students. It includes access to approximately 950,000 graduate school scholarships with an aggregate value of more than $1 billion.
In addition, through the Bank’s CRA program, the Bank focuses on access to finance by fulfilling its CRA obligations through consumer and community development lending, qualified investments, including grants to community development organizations and education scholarships tolow- and moderate-income persons, and community development service activity, focusing on underserved communities in the Bank’s assessment area.
To further fulfill our mission, we’ve introduced a number of programs and thought-leadership initiatives, including:
Sallie Mae’s Bridging the Dream Scholarship Program.Sallie Mae’s Bridging the Dream Scholarship Program recognizes students who have excelled both inside and outside of the classroom, but whose financial circumstances or other obstacles in life may not allow them to pursue a college education. In addition to corporate contributions, Sallie Mae employees raise money to help fund these scholarships through 5K races, bake sales, and silent auctions. Over the past three years, Sallie Mae has awarded more than $430,000 in Bridging the Dream scholarships to undergraduate and graduate students.
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Financial Literacy Initiatives with Educator, TurnedHip-Hop Artist,Dee-1.Sallie Mae partnered withhip-hop recording artist, motivational speaker, and former middle-school teacher,Dee-1, to educate high school students about planning for college and financial literacy. Together,Dee-1 and Sallie Mae have visited high schools and youth groups across the country, awarding $190,000 in scholarships and student loan payments. This award-winning, nationwide tour reached more than 10,000 high school students in 2018.
National and State Partnerships. Sallie Mae has cultivated relationships with national organizations including the National Association of Insurance and Financial Advisors, various credit unions, and states to develop and distribute college planning materials to tens of thousands of students and families. In Michigan, we partnered with the state to provide access to financial literacy tools and resources to more than 650,000 students, families, and school counselors. In Wisconsin, we received the Governor’s Financial Literacy Award for our tour withDee-1, and the Governor’s “College Resource” guide features our college planning tools. Most recently, we partnered with Ohio’s 529 college savings plan to host a webinar for Ohio families on saving, planning, and paying for college.
Annual Research and Thought Leadership. For more than a decade, Sallie Mae has created leading research that provides valuable insight into how families pay, save for, and value college, and how young adults manage their finances. This research is regularly featured in the national media and used by higher education institutions and policymakers to monitor trends and make informed decisions for students and families.
Awards and Recognition
Over the last year, our diversity and inclusion efforts, support for military, and innovative products, scholarship programs, and financial literacy initiatives have been recognized, including:
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Human Capital Management and Talent Development
We value our highly-skilled employees at all levels who help us drive sustainable, long-term growth, and profitability. We express our appreciation through:
Policies and programs to identify, develop, retain, and promote talent from within our workforce;
Our management incentive plan and long-term incentive plan providing for cash and equity bonuses to employees to help incentivize employee productivity, which contributes to our success;
Our policies intended to provide equal employment opportunity in all terms and conditions or employment for all employees and job applicants without regard to an employee’s or applicant’s race, color,ethnicity, religion, sex, sexual orientation, age, disability, national origin, marital status, citizenship status, protected veteran status, genetic information, gender identity, or any other basis prohibited by applicable law; and
Opportunities affordedgiven to employees in order toso they may serve their communities through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program as described in more detail below.Program.
Community
At Sallie Mae, we are passionate about getting involved and giving back in the communities where we live and work. We strive to help create brighter futures by working directly withnot-for-profit organizations such as Junior Achievement, Big Brothers Big Sisters, Special Olympics, and Folds of Honor in order to help students, families, and individuals in our communities.Honor. Sallie Mae employees regularly volunteer in our localtheir communities, collecting and donating gifts to local families, sortingeducating grade school students on financial literacy and packaging books for children,consumer finance, and packing meals for families in need.
2019 Proxy Statement —18 SLM CORPORATION 19—2020 Proxy Statement
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The Sallie Mae Employee Volunteer Program gives full-time employees paid time off to volunteer in their community. We encourage employees to participate in the volunteer activities they are passionate about, and their volunteerism enhances the communities in which we operate. Our employees volunteer to teach children, help animals, and improve the environment, among other things. In 2018, Sallie Mae paid its employees for 1,324 hours while they volunteered that amount of time pursuant to The Sallie Mae Volunteer Program.
In addition, the Sallie Mae Employee Matching Gift Program encourages employees’ voluntary support ofnon-profit organizations by matching personal donations to Internal Revenue Service registered charities through the Company’s charitable organization (The Sallie Mae Fund) dollar for dollar from $25 to a maximum $1,000 per employee per calendar year. In 2018, The Sallie Mae Fund matched $23,000 in employee donations.
The Sallie Mae Fund
Since April 30, 2014, when Navient Corporation (“Navient”) spun off from the Company, the Sallie Mae Fund, our charitable foundation, has contributed more than $1.87 million to address key barriers to college access and support the community. The Sallie Mae Fund supports programs and initiatives that (i) help open doors to higher education, (ii) encourage academic and personal achievement through the arts, and (iii) aim to end food scarcity. Some of the key programs and initiatives include:
Kids2College—inspiring a college-attending culture, we build local partnerships in communities where there is a need for early-college awareness.
Junior Achievement Career Fusion—helping to prepare middle and high school students for future employability and empower them to own and build their economic success.
Matching Gifts—empowering employees to “double their dollars” to build healthy and sustainable communities.
Cybersecurity and Data Protection
Sallie Mae takes data privacy and security very seriously. Our privacy policy is publicly available on our website atwww.salliemae.com under “Protect your privacy”, which sets forth the data privacy practices related to the collection, use, and sharing of customer information across Sallie Mae products and business lines.
We have developed comprehensive data privacy and security-related internal policies and procedures, including, but not limited to, the Corporate Information Security Program, Customer Information Safeguarding Program, Information Security Policy, and Privacy Policy and Procedures, which dictate requirements and controls intended to protect customer and company information. Our data privacy and security related policies and procedures are examined regularly by internal and external auditors, bank regulators, and third-party consultants. In addition, our vendors, contractors, and consultants are subject to security and privacy policies and contract provisions as appropriate for the services or products being provided.
We regularly test and train internal staff and management on the importance of data privacy and security, as well as regularly provide data privacy and security employee-wide initiatives consisting of multiple data privacy and security trainings, including avoidance of phishing emails, and how to report data privacy events or other suspicious activity. We also maintain a robust security controls environment where controls are appropriately classified and are tested in accordance with a defined strategy. In addition, we have developed a comprehensive Cybersecurity Incident Response Program (the “Program”), which sets forth detailed enterprise-wide policies and procedures related to responding to a cybersecurity event. The Program procedures are tested through cybersecurity incident response exercises performed by independent third-party consultants, and mandates attendance and participation by key executives and senior management across the business.
Pursuant to the authority delegated to the Risk Committee by the Board of Directors under its charter made available at the Investor section of our website, the Risk Committee is responsible for continually, as well as at specific intervals, monitoring risks and risk management capabilities within the Company, including related to information security, crisis preparedness, business continuity and disaster recovery plans, including data privacy and security. Accordingly, any material risks to Sallie Mae related to data privacy and security are escalated by executive management to the Risk Committee of the Board of Directors, as appropriate.
Environmental StewardshipJim Matheson
William N. Shiebler
Kirsten O. Wolberg
Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under ourBy-Laws, the Board of Directors has the authority to determine the size of the Board of Directors within that range and to fill any vacancies that may arise prior to the next annual meeting of stockholders. The Board of Directors has set the number of members at 12.
Biographical information, qualifications, and experience with respect to each director nominee appear below. In addition to fulfilling the general criteria for director nominees described in the section titled “Nominations Process,” each nominee possesses experience, skills, attributes, and other qualifications the Board of Directors has determined support its oversight and management of Sallie Mae’s business, operations, and structure. These qualifications are discussed below, along with biographical information regarding each director nominee, including each individual’s age, principal occupation, and business experience during the past five years. Information concerning each director nominee is based in part on information received from the respective director nominee and in part from Sallie Mae’s records.
All nominees appearing below have consented to being named in this proxy statement and to serve if elected. Should any nominee subsequently decline or be unable to accept such nomination to serve as a director, the Board of Directors may designate a substitute nominee or the persons voting the shares represented by proxies solicited hereby may vote such shares for a reduced number of nominees. If the Board of Directors designates a substitute nominee, persons named as proxies will vote“FOR” that substitute nominee.
OurBy-Laws provide the election of a director in an uncontested election will be by a majority of the votes cast with respect to a nominee at a meeting for the election of directors at which a quorum is present. Each share of Common Stock is entitled to one vote for each nominee. A director nominee will be elected to the Board of Directors if the number of shares voted“FOR” the nominee exceeds the number of votes cast“AGAINST” the nominee’s election. Abstentions and shares not voted on the proposal, including brokernon-votes, are of no effect.
If any director nominee fails to receive a majority of the votes cast“FOR” his or her election, such nominee will automatically tender his or her resignation upon certification of the election results. The Nominations, Governance and Compensation Committee (the “NGC Committee”) of the Board of Directors will make a recommendation to the Board of Directors on whether to accept or reject such nominee’s resignation. The Board of Directors will act on the NGC Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of certification of the election results.
2 SLM CORPORATION —2020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
PAUL G. CHILD Former Office Managing Partner, Salt Lake City, Deloitte LLP (Independent) (Lead Director) | Professional Highlights: • Office Managing Partner, Salt Lake City, Deloitte LLP—1995 to 2008; Professional Practice Director, Salt Lake City—1989 to 1995; Audit Partner—1983 to 2008; various positions—1971 to 1983 Other Professional and • Director, Sallie Mae Bank—2009 to
• Director, Mountainwest Capital Network—2002 to • Director, United Way of | Qualifications: Mr. Child’s leadership roles and
Director since:April 2014 | ||||||||
MARY CARTER WARREN FRANKE Former Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co. (Independent) | Professional Highlights: • Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co.—2007 to 2013 • Executive Vice President and Chief Marketing Officer, Chase Card Services—1995 to 2007 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2014 to present • Director, The Warfield Fund—2007 to present • Director, Saint Mary’s School—2014 to present • Director, Hobe Sound Community Chest—2017 to present • Director, Paul’s Place—2014 to 2017 | Qualifications: Ms. Franke’s leadership roles and experience in marketing and the banking industry enable her to contribute to the Board of Directors experience in the areas of marketing, business development, and financial services. Age: 63 Director since:April 2014 |
2020 Proxy Statement —SLM CORPORATION 3
PROPOSAL 1—ELECTIONOF DIRECTORS
EARL A. GOODE Chief of Staff to the Governor of Indiana (Independent) (Strategic Planning CommitteeCo-Char) | Professional Highlights: • Chief of Staff to the Governor of Indiana—2006 to 2013; 2017 to present • President, Indianapolis Capital Improvement Board of Managers—2015 to 2016 • Deputy Chief of Staff to the Governor of Indiana—2006 • Commissioner, Department of Administration, State of Indiana—2005 to 2006 • Chairman, Indiana Sports Corporation—2001 to 2006 • President, GTE Information Services and GTE Directories Company—1994 to 2000; President, GTE Telephone Operations North and East—1990 to 1994; President, GTE Telephone Company of the Southwest—1988 to 1990 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2013 to present • Member and Former Chairman, Georgetown College Board of Trustees—2006 to present • Member, Marion County Capitol Improvement Board—2019 to present • Member and Executive Committee, Indianapolis Championship Fund— 2018 to present | Qualifications: Mr. Goode has held several leadership positions in business services and operations. This experience, combined with his involvement in the state political process, enables him to contribute to the Board of Directors in the areas of marketing and product development, business operations, and political and government affairs. Age: 79 Director since:July 2000 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
MARIANNE M. KELER Attorney, Keler & Kershow PLLC (Independent) (Audit Committee Chair) | Professional Highlights: • Attorney, Keler & Kershow PLLC—2006 to present • Executive Vice President, Consumer Finance, Corporate Strategy & Administration, Sallie Mae—2004 to 2006 • Senior Vice President & General Counsel, Sallie Mae; President, Student Loan Marketing Association—1997 to 2004 • Vice President & Associate General Counsel, Student Loan Marketing Association—1990 to 1997; various other positions—1985 to 1997 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2010 to present • Board Chair, Building Hope (charter school lender)—2004 to present • Board Chair, Institute for American Universities—2018 to present • Finance Committee Chair, Institute for American Universities—2008 to 2016; • Board Chair, American University in Bulgaria, EL Haynes Charter School—2008 to 2014 • Member, Georgetown University Board of Regents—2009 to 2015 • Founding Director, National Student Clearinghouse—1993 to 2009 Directorship of other public companies: • CubeSmart (NYSE: CUBE)—2007 to present; Board Chair— 2018 to present | Qualifications: Ms. Keler’s legal background and experience in the student loan industry and with Sallie Mae bring valuable perspective to the Board of Directors in the areas of student and consumer lending, legal and corporate governance, and higher education. Age: 65 Director since:April 2014 | ||||||||
MARK L. LAVELLE Former Senior Vice President, Commerce Cloud, Adobe Inc. (Independent) | Professional Highlights: • Senior Vice President, Commerce Cloud, Adobe Inc.—2018 to 2019 • Chief Executive Officer, Magento Commerce—2015 to 2018 • Senior Vice President, Product, eBay Enterprise 2013 to 2015 • Senior Vice President, Strategy and Partnerships, eBay, Inc.—2012 to 2013 • Senior Vice President, Strategy and Business Development, PayPal, Inc.—2009 to 2012 • Co-Founder and Vice President, Corporate Development, Bill Me Later, Inc.—2001 to 2009 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2019 to present • Director, Armada Inc—2018 to present • Director, Second Chance—2008 to present | Qualifications: Mr. Lavelle’s extensive experience developing and scaling businesses encompassing financial services, commerce, and information technology allows him to provide valuable insight to the Board of Directors in the areas of risk management, strategy, acquisitions, and business operations. Age: 54 Director since:April 2019 |
2020 Proxy Statement —SLM CORPORATION 5
PROPOSAL 1—ELECTIONOF DIRECTORS
JIM MATHESON Chief Executive Officer, NRECA (Independent) | Professional Highlights: • Chief Executive Officer, National Rural Electric Cooperative Association—2016 to present • Principal in the Public Policy Practice, Squire Patton Boggs—2015 to 2016 • Member of the United States House of Representatives—2001 to 2015 • Founder of The Matheson Group—1999 to 2000 • Consultant, Energy Strategies, Inc.—1991 to 1998 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2015 to present • Service on the United States House of Representatives Energy and Commerce Committee—2007 to 2015; Science Committee—2001 to 2011; Financial Services Committee—2003 to 2007; and Transportation and Infrastructure Committee—2001 to 2007 • Chief Deputy Whip for the Democratic Caucus of the United States House of Representatives—2011 to 2015 • Board Member, United States Association of Former Members of Congress—2015 to present • Director, United States Global Leadership Coalition—2019 to present | Qualifications:Mr. Matheson’s extensive experience in public policy and financial services enables him to bring to the Board of Directors a valuable perspective in development of business strategies and on public policy and regulatory matters. Age: 60 Director since:March 2015 | ||||||||
FRANK C. PULEO Attorney (Independent) (Risk Committee Chair) | Professional Highlights: • Attorney—2006 to 2016 • Co-Chair, Global Finance Group, Milbank, Tweed, Hadley & McCloy LLP, a law firm—1995 to 2006; Partner—1978 to 2006 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2013 to present • Director, South Street Securities Holdings Inc. (f/k/a CMET Finance)—2008 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Director, CIFC Corporation—2006 to 2014 Directorships of other public companies: • Apollo Investment Corporation—2007 to present | Qualifications: Mr. Puleo’s background as a corporate and finance attorney enables him to bring analytical, legal, and financial insight to the Board of Directors in the areas of financial services, capital markets transactions, and corporate governance. Age: 74 Director since:March 2008 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
VIVIAN C. SCHNECK-LAST Former Managing Director, (Independent) | Professional Highlights: • Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to 2014 • Managing Director, Global Head of Technology Business Development, Goldman Sachs & Company—2000 to 2014 • Managing Director, Global Head of Technology Vendor Management, Goldman Sachs & Company—2003 to 2014 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2015 to present • Advisor/Director, Portrait Capital Systems, LLC—2015 to 2019 • Advisor/ Director, Coronet—2015 to present • Director, Bikur Cholim of Manhattan—2014 to present Directorships of other public companies: • SCVX—2020 to present | Qualifications: Ms. Schneck-Last’s strategic technology experience and background in technology governance in the financial services field bring valuable perspective to the Board of Directors in risk management and on a broad range of enterprise technology matters. Age: 59 Director since:March 2015 | ||||||||
WILLIAM N. SHIEBLER Private Investor (Independent) (NGC Committee Chair) | Professional Highlights: • Private Investor—2007 to present • Chief Executive Officer of the Americas, Deutsche Asset Management (Deutsche Bank)—2002 to 2007 • President and Chief Executive Officer, Putnam Mutual Funds; Senior Managing Director, Putnam Investments—1990 to 1999 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2010 to present • Trustee, Buffalo Bill Center of the West in Cody, WY—2007 to present; Elected as Vice Chairman and Chairman Elect—2019; Chairman—2020 Directorships of other public companies: • Calamos Asset Management, Inc.—2012 to 2017 • OXiGENE, Inc.—2002 to 2012 • MasTec Inc.—2001 to 2004 | Qualifications: Mr. Shiebler’s extensive experience in the financial services industry and with other public companies allows him to provide valuable insight to the Board of Directors in the areas of finance, portfolio management, and business operations. Age: 78 Director since:April 2014 |
2020 Proxy Statement —SLM CORPORATION 7
PROPOSAL 1—ELECTIONOF DIRECTORS
ROBERT S. STRONG Former Managing Director, Chairman, Capital (Independent) (Compliance Committee Chair) (Preferred Stock Committee Chair) | Professional Highlights: • Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to 2007 • Managing Director, Portfolio Management, Bank of America Securities—2001 to 2006 • Executive Vice President, Chief Credit Officer, JP Morgan Chase Bank—1996 to 2001 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2014 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Member, Financial Policy Review Board for the State of New Jersey—2013 to 2016 • Director, CamberLink Inc.—2013 to 2016 | Qualifications: Mr. Strong’s extensive experience in the banking and financial services industries allows him to provide valuable insight to the Board of Directors in the areas of finance, risk management, portfolio management, and business operations. Age: 71 Director since:April 2014 | ||||||||
JONATHAN W. WITTER Chief Executive Officer, Sallie Mae (Executive; Not Independent) | Professional Highlights: • Chief Executive Officer and Director, Sallie Mae—April 2020 to present • Executive Vice President and Chief Customer Officer, Hilton Worldwide Holdings—April 2017 to April 2020 • President—Retail and Direct Banking, Capital One Financial Corporation—February 2012 to March 2017 • President—Retail and Small Business Banking, Capital One Financial Corporation—September 2011 to February 2012 • Executive Vice President—Retail Banking, Capital One Financial Corporation—December 2010 to September 2011 • Chief Operating Officer—Retail Banking Group and President, Morgan Stanley Private Bank—2009 to December 2010 • Executive Vice President and Head of General Bank Distribution, Wachovia (now Wells Fargo & Company)—2004 to 2009 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—April 2020 to present | Qualifications: Mr. Witter’s extensive background and significant leadership experience in the banking industry and his customer experience expertise allow him to provide business and leadership insight to the Board of Directors in the areas of banking, financial services, capital markets, business operations and customer service. Age: 50 Director since:April 2020 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
KIRSTEN O. WOLBERG Chief Technology and (Independent) | Professional Highlights: • Chief Technology and Operations Officer, DocuSign—2017 to present • Vice President, PayPal Separation Executive, PayPal, Inc.—2014 to 2017 • Vice President, Technology, PayPal, Inc.—2012 to 2014 • Chief Information Officer, Salesforce.com—2008 to 2011 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2016 to present • Vice President, Corporate Technology, Charles Schwab & Co.—2001 to 2008 • Director, Year Up—2008 to present • Director, Jewish Vocational Services—2014 to present Directorships of other public companies: • Silicon Graphics International Corp.—2016 | Qualifications: Ms. Wolberg’s extensive experience in information technology for the financial services industry allows her to provide valuable insight to the Board of Directors in the areas of finance, information technology risks, and business operations. Age: 52 Director since:November 2016 |
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE ELECTION OF THE TWELVE NOMINEES NAMED ABOVE. |
2020 Proxy Statement —SLM CORPORATION 9
PROPOSAL 2—ADVISORY VOTEON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Sallie Mae is asking stockholders to approve an advisory resolution (commonly referred to as a“say-on-pay” resolution) on its executive compensation as reported in this proxy statement. Sallie Mae urges stockholders to read the “Compensation Discussion and Analysis” section (“CD&A”) of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of Sallie Mae’s named executive officers (“NEOs”).
At our annual meeting of stockholders held in June 2019, we submitted anon-binding vote to our stockholders to approve our executive compensation. Approximately 96.0 percent of the stockholders voted in favor of thesay-on-pay proposal. We attribute that broad support in part to our continued efforts to understand and address the feedback we received from our stockholders. Specifically, we continue to focus on performance-based compensation for our NEOs as we (i) tie a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business, and, (ii) award a greater percentage of the NEO’s long-term incentive plan equity award (“LTIP”) in the form of performance stock units (“PSUs”). In 2019, as part of our plan to increase the percentage of compensation tied to performance, we increased the amount of PSUs awarded to NEOs under the LTIP from 25 percent to 50 percent.
The compensation awarded to our former Chief Executive Officer (“CEO”), Raymond J. Quinlan, and other NEOs for 2019 recognizes the positive performance of the Company. The NGC Committee is mindful of its responsibility to align executive compensation with the overall performance of the Company, while taking into consideration the need to provide market competitive compensation in order to recruit and retain highly skilled and experienced executives. The CD&A provides a comprehensive discussion and rationale for the 2019 pay decisions made by the NGC Committee and the correlation to Company performance.
As described in the CD&A, our executive compensation programs are designed to attract, retain, and motivate our NEOs, who are important to our long-term success. Under these programs, we provide our NEOs with appropriate objectives and incentives to achieve our business goals. We believe that our compensation features demonstrate our responsiveness to our stockholders, our commitment to ourpay-for-performance philosophy, and our goal of aligning management’s interests with those of our stockholders to support the creation of long-term value.
The Board of Directors has adopted a policy providing for annual“say-on-pay” advisory votes. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, Sallie Mae is asking stockholders to approve the following advisory resolution at the Annual Meeting:
“Resolved, that Sallie Mae’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis and the related compensation tables and narrative disclosure in this proxy statement.”
This proposal to approve the resolution regarding the compensation of Sallie Mae’s NEOs requires the affirmative vote of the holders of a majority of the Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGC Committee or the Board of Directors. However, the NGC Committee will, as it has done in the past, carefully evaluate the outcome of the vote when considering future executive compensation decisions.
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE RELATED COMPENSATION TABLES AND NARRATIVE DISCLOSURE IN THIS PROXY STATEMENT. |
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PROPOSAL 3—RATIFICATIONOFTHE APPOINTMENTOFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Sallie Mae’s independent registered public accounting firm, KPMG LLP (“KPMG”), is selected by the Audit Committee of Sallie Mae’s Board of Directors (the “Audit Committee”). The Audit Committee has engaged KPMG as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2020. Representatives of KPMG are expected to be present at the Annual Meeting, and they will have the opportunity to respond to appropriate questions from stockholders and to make a statement if they desire to do so.
This proposal is put before the stockholders because the Board of Directors believes it is a good corporate governance practice to provide stockholders a vote on ratification of the selection of the independent registered public accounting firm.
For ratification, this proposal will require the affirmative vote of the holders of a majority of the shares of Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the basis for the stockholders’ vote when determining whether to continue the firm’s engagement. Even if the selection of Sallie Mae’s independent registered public accounting firm is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during 2020 if, in its discretion, it determines such a change would be in the Company’s best interests.
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR”RATIFICATION OF THE APPOINTMENT OF KPMG AS SALLIE MAE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020. |
2020 Proxy Statement —SLM CORPORATION 11
CORPORATE GOVERNANCE
Roles and Responsibilities of the Board of Directors
The Board of Directors believes strong corporate governance is critical to achieving Sallie Mae’s performance goals and to maintaining the trust and confidence of investors, employees, regulatory agencies, and other stakeholders.
The primary responsibilities of the Board of Directors are to:
Review Sallie Mae’s long-term strategies and set long-term performance metrics;
Review risks affecting Sallie Mae and its processes for managing those risks, and oversee assignment of various aspects of risk management, compliance, and governance;
Select, evaluate, and compensate the CEO and our NEOs;
Plan for succession of the CEO and members of the executive management team;
Review and approve Sallie Mae’s annual business plan and multi-year strategic plan, and periodically review performance against such plans;
Review and approve major transactions and business initiatives;
Through its Audit Committee, select and oversee Sallie Mae’s independent registered public accounting firm;
Recommend director candidates for election by stockholders; and
Evaluate its own effectiveness.
The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the NGC Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published atwww.salliemae.com under “For Investors,” and a written copy may be obtained by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, DE 19713. The Guidelines, along with Sallie Mae’sBy-Laws, embody the following governance practices, among others:
A majority of the members of the Board of Directors must be independent directors, and all members of the Audit and NGC Committees must be independent.
All directors stand forre-election each year. Directors are elected under a majority vote standard in uncontested elections.
We have historically combined the roles of Chairman of the Board of Directors and CEO; however, as set forth in greater detail in the Section titled “Board Leadership Structure,” as of April 19, 2020, we have separated the role of Chairman of the Board of Directors from CEO, and anticipate maintaining this separation going forward. We also have a Lead Independent Director elected by the Board of Directors.
Each regularly scheduled Board of Directors meeting concludes with an executive session in which only members of the Board of Directors participate. Each regularly scheduled committee meeting also generally concludes with an executive session presided over by the committee Chair.
We maintain stock ownership and retention guidelines for directors and executive officers.
The Board of Directors and its committees conduct performance reviews annually.
The Board of Directors and its committees may engage their own advisors.
On April 19, 2020, in connection with the appointment of Mr. Witter as the Company’s CEO, the Board of Directors adopted a structure separating the Chairman of the Board of Directors from the CEO, which was initially reported in our Form8-K filed on March 5, 2020. Currently, Mr. Quinlan, the Company’s former CEO, serves as the Chairman of the Board of Directors (as well as the Chairman of the Sallie
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CORPORATE GOVERNANCE
Mae Bank, our wholly-owned subsidiary (the “Bank”) Board of Directors) and will serve in this role until June 18, 2020, at which time Mr. Quinlan will no longer serve on the Board of Directors, and the Board of Directors will appoint one of the Company’s independent directors then in service to serve as the independent Chair of the Board of Directors of the Company, as well as the Chair of the Bank Board of Directors. The Board of Directors believes that, after June 18, 2020, an independent director is best situated to serve as Chair of our Board of Directors and of the Bank Board of Directors to serve as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. The Board of Directors believes that the Company is currently best served by separating the role of Chair and CEO, but the Board of Directors, consistent with the Company’s governance guidelines and subject to the Company’sby-laws, reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at a given point in time. Our Chairman currently serves, and the independent Chair after June 18, 2020 will serve, as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and shareholders. In addition to our separate Chair and CEO structure, the Board of Directors’ governance guidelines provide for a Lead Independent Director to facilitate coordination of the activities of the Company’s independent directors. This position is currently held by Paul Child, an independent director who serves as our Lead Independent Director as well as a member on three of our committees of the Board of Directors: the Audit, Risk, and Strategic Planning Committees. As Lead Independent Director, Mr. Child also attends all meetings held by our Board of Directors’ other committees. Our Lead Independent Director has historically provided strong independent leadership for the Board of Directors.
For a director to be considered independent, the Board of Directors must determine the director does not have any direct or indirect material relationship with Sallie Mae. The Board of Directors has adopted the Guidelines, which embody the corporate governance principles and practices of the Company. The Guidelines include the standards for determining director independence, which conform to the independence requirements of the NASDAQ Global Select Market (“NASDAQ”) listing standards.
The Board of Directors has determined that all of the individuals who served as a director during 2019, other than Mr. Quinlan, our former CEO, and all nominees standing for election at the Annual Meeting, other than Mr. Witter, our current CEO, are independent of Sallie Mae.
Each member of the Board of Directors’ Audit and NGC Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines.
As of December 31, 2019, our Board of Directors consisted of the following:
2020 Proxy Statement —SLM CORPORATION 13
CORPORATE GOVERNANCE
Board, Committee, and Annual Meeting Attendance
Our Board of Directors met nine times in 2019. Each of the then-serving directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which he or she served. Directors are expected to attend the Annual Meeting, and twelve of thirteen of the then-serving members of the Board of Directors attended the Annual Meeting in June 2019. The only director not in attendance at the Annual Meeting in June 2019 was Jed Pitcher, who did not seekre-election to the Board of Directors at the June 2019 Annual Meeting.
Roles of the Board and Its Committees
The Board of Directors has established the following standing committees to assist in its oversight responsibilities: Audit; NGC; Risk; Strategic Planning; and Preferred Stock. Separately, the Bank Board of Directors has also established a Compliance Committee. Each committee is governed by a Board-approved written charter, which is evaluated annually and which sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.
All of our committee charters, including the charter for our NGC Committee, are available atwww.salliemae.com under “For Investors, Corporate governance.” Stockholders may obtain a written copy of any and all committee charters by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
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CORPORATE GOVERNANCE
The following table sets forth the membership and number of meetings held for each committee of the Board of Directors as of December 31, 2019. Mr. Witter has not served on any committees since his appointment to the Board of Directors on April 20, 2020.
Audit(1) | Nominations, Governance and Compensation | Risk(2) | Strategic Planning | Preferred Stock | |||||||||||||||||||||
Paul G. Child(1) (2) (l) (L) | * | * | * | ||||||||||||||||||||||
Mary Carter Warren Franke(2) (I) | * | * | * | ||||||||||||||||||||||
Earl A. Goode+(1) (I) | * | Co-Chair | |||||||||||||||||||||||
Marianne M. Keler(1) (I) | Chair | * | * | ||||||||||||||||||||||
Mark L. Lavelle(2) (I) | * | * | * | ||||||||||||||||||||||
Jim Matheson(I) | * | * | |||||||||||||||||||||||
Frank C. Puleo+(2) (I) | Chair | * | |||||||||||||||||||||||
Raymond J. Quinlan+(C) | Co-Chair | ||||||||||||||||||||||||
Vivian Schneck-Last(2) (I) | * | * | * | ||||||||||||||||||||||
William N. Shiebler+(1) (I) | Chair | * | * | ||||||||||||||||||||||
Robert S. Strong++(1) (2) (I) | * | Chair | |||||||||||||||||||||||
Kirsten O. Wolberg(I) | * | * | |||||||||||||||||||||||
Number of Meetings in 2019 | 10 | 12 | 9 | 2 | 1 |
* | Committee Member |
+ | Also serves as a member of the Bank Compliance Committee. |
++ | Also serves as Chair of the Bank Compliance Committee. |
(C) | Chairman of the Board of Directors |
(I) | Independent Board Member |
(L) | Lead Independent Director |
(1) | The Board of Directors determined Mr. Child, Mr. Goode, Ms. Keler, Mr. Shiebler, and Mr. Strong each qualified as an “Audit Committee Financial Expert” as set forth in Item 407(d)(5) of RegulationS-K. During 2019, none of the Audit Committee members served on the Audit Committee of more than three public companies. |
(2) | The Board of Directors determined Mr. Child, Ms. Franke, Mr. Lavelle, Mr. Puleo, Ms. Schneck-Last, and Mr. Strong each qualified as a “Risk Management Expert” as such term is defined by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the rules and regulations promulgated thereunder. |
2020 Proxy Statement —SLM CORPORATION 15
CORPORATE GOVERNANCE
The Board of Directors and its committees oversee Sallie Mae’s overall strategic direction, including setting risk management philosophy, tolerance and parameters, and establishing procedures for assessing the risks of each business line as well as the risk management practices the management team develops and utilizes. Management escalates to the Board of Directors and/or its committees any significant departures from established tolerances and parameters and reviews new and emerging risks. Throughout the year, the Board of Directors and/or its committees dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail with senior management, including risks related to cybersecurity. The primary risk oversight responsibilities of each of the standing committees of the Board of Directors are as follows:
Audit Committee • review of financial statements and periodic public reports; • sufficiency of internal controls over financial reporting and disclosure controls; • engage and communicate with our independent registered public accounting firm; and • operation of internal audit function, staffing, and work plan. | Nominations, Governance and Compensation Committee • all compensation and benefits for our CEO, Executive Officers, and independent directors; • equity-based compensation plans; • management’s administration of employee benefit plans; • management succession planning; • confirm our incentive compensation practices properly balance risk and reward and do not encourage excessiverisk-taking; • implement good governance policies and measures for Sallie Mae and our Board of Directors; • recommend nominees for election to the Board of Directors; • conduct assessments of the performance of the Board of Directors and its committees; and • review related party transactions. | Risk Committee • monitor our major risk categories, including credit, funding and liquidity, market, compliance, legal, operational, reputational and strategic, as well as our risk management capabilities, including those related to financial product safety, information and data security, privacy, crisis preparedness, business continuity, and disaster recovery plans (which responsibilities include oversight of the Company’s cybersecurity risk, profile assessments, and monitoring, as well as review of the Company’s strategy to mitigate cybersecurity risks); • review, approve, and authorize the terms and conditions of any loan securitization transaction, loan sale, or debt transaction of our Company or our affiliates; • review our risk management framework and supporting governance structure, roles, and responsibilities established by management; • facilitate the distribution of risk-related information provided to the Risk Committee across and among the Board of Directors and its other committees, including cybersecurity and other information security issues, risks, and threats; and • review our risk appetite framework and conduct regular reviews of key risk measures. | Strategic Planning Committee • engage the CEO and senior management in the strategic planning process and recommend proposals regarding the Company’s long-term strategic initiatives. | Preferred Stock Committee • monitor and evaluate our business activities in light of the rights of holders of the Company’s preferred stock. |
The Bank Committees |
All members of the Board of Directors also serve as members of the board of directors of the Bank and its committees. Our Audit, NGC, Risk, and Strategic Planning committees perform similar oversight roles for the Bank. Separately, a Compliance Committee of the Bank Board of Directors has oversight over the establishment of standards related to our monitoring and control of legal and regulatory compliance risks and the qualification of employees overseeing these functions. The Compliance Committee oversees the Bank’s Community Reinvestment Act (“CRA”) program and monitors its progress towards its CRA performance goals. Through the Bank’s CRA program, the Bank focuses on access to finance by fulfilling its CRA obligations through consumer and community development lending, qualified investments, including grants to community development organizations and education scholarships tolow- and moderate-income persons, and community development service activity, focusing on underserved communities in the Bank’s assessment area. During the 2019-2020 Board term, the Chair of the Compliance Committee was Mr. Strong. Other members of the Compliance Committee were Mr. Goode, Mr. Puleo, Mr. Shiebler, and Mr. Quinlan. |
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CORPORATE GOVERNANCE
The NGC Committee considers for nomination to the Board of Directors candidates recommended by stockholders and members of the Board of Directors. The candidates are evaluated based on the needs of the Board of Directors and Sallie Mae at that time. The Board of Directors seeks representation that reflects gender, ethnic, and geographic diversity. The minimum qualifications and attributes the NGC Committee believes a director nominee must possess include:
Knowledge of the business of Sallie Mae;
Proven record of accomplishment;
Willingness to commit the time necessary for Board of Directors service;
Integrity and sound judgment in areas relevant to the business;
Impartiality in representing stockholders;
Ability to challenge and stimulate management; and
Independence.
To recommend a candidate, stockholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chair of the NGC Committee atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713. The stockholder should also include his or her contact information and a statement of his or her share ownership. The nomination deadline for the 2020 Annual Meeting has now closed. A stockholder wishing to nominate a candidate must comply with the notice and other requirements described under “Stockholder Proposals for the 2021 Annual Meeting” in this proxy statement.
Sallie Mae has a written policy regarding review and approval of related party transactions. Transactions covered by the policy are transactions involving Sallie Mae in excess of $120,000 in any year in which any director, nominee, executive officer, or greater-than-five percent beneficial owner of the Company, or any of their respective immediate family members, has or had a direct or indirect material interest, other than solely as a director and/orless-than-ten percent owner of an entity involved in the transaction (“Related Party Transactions”). Loans made in the ordinary course of Sallie Mae’s business to executive officers, directors, and their family members are considered Related Party Transactions and arepre-approved. Moreover, the Bank has also adopted written policies to implement the requirements of Regulation O of the Board of Governors of the Federal Reserve System, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be, and are, approved by the Board of Directors of the Bank. In 2019, the Company issued a credit card to Mr. Thome with a total of $10,000 of credit extended to him. Such credit card was issued in the ordinary course of business; is on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company; and does not involve more than the normal risk of collectability or present other features unfavorable to the Company. Since January 1, 2019, we have not had any other transactions with related persons required to be disclosed under Item 404(a) of RegulationS-K, and no such transactions are currently proposed.
Under the Related Party Transactions policy, the General Counsel will notify the Chair of the NGC Committee of any proposed Related Party Transaction, and the Chair of the NGC Committee will determine if approval under the policy is required. If required, the NGC Committee will then review the proposed Related Party Transaction and make a recommendation to the Board of Directors regarding whether to approve the transaction. In considering a transaction, the NGC Committee takes into account whether a transaction would be on terms no less favorable than to an unaffiliated third-party under the same or similar circumstances, among other factors.
Environmental, Social and Governance Practices
In conducting our business, we continually pursue practices that we believe will drive sustainable, long-term growth and profitability. Such “environmental, social and governance” or “ESG” practices mean different things to different investors and to the organizations that evaluate and rate ESG practices. For us, ESG practices mean we embrace the core principles of corporate responsibility and social purpose through everything we do for our customers, employees, communities, and environment. Our actions are shaped by our mission and purpose—helping families achieve the dream of a higher education. As an application of ESG practices, the Global Reporting Initiative Standards, the
2020 Proxy Statement —SLM CORPORATION 17
CORPORATE GOVERNANCE
Sustainability Accounting Standards Board, and the United Nations Sustainable Development Goals (“SDGs”) are considered a roadmap for corporations to serve the long-term goals of society. These SDGs include SDG4-Quality Education (“SDG 4”), which aims to ensure inclusive and quality education for all. We support the general goals of SDG 4 and agree that education is one of the most powerful and proven vehicles for sustainable development. We support the goal of universal access to quality higher education, whether it be for a degree program, continuing education, or certificate training.
At its core, education creates opportunities for individuals to realize their dreams, succeed, and lead more fulfilling and purposeful lives. Those who attend and graduate from college move forward with a wide range of personal, financial, and other lifelong benefits, including an ability to positively affect the outcomes of our most significant societal challenges.
ESG at a Glance
We describe some of our key ESG practices in this section, but more details regarding ESG can be found in our inaugural Corporate Social Responsibility Report (“CSR Report”) that was published in March 2020 and available on our website athttp://www.salliemae.com/csr. The CSR Report is not incorporated by reference herein, and is not a part of this proxy statement or the 2019 Form10-K.
Our Customers
As the premier financial brand for college and continuous education, we are in the business of building prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Along with a company-wide commitment to honesty, dependability, and integrity, we are committed to:
Offering our customers a diversified set of fairly priced products;
Increasing our customers’ long-term financial stability;
Treating our customers and partners with respect;
Rewarding successful customer credit management(on-time payment incentive);
Contributing time and resources to improving our community; and
Creating a work environment that enables our employees to reach their potential.
These commitments form the foundation of our mutual success. In addition, we are committed to helping our next generation make informed decisions about their education. After all, education in all forms is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility.
Human Capital Management and Talent Development
We value our highly-skilled employees at all levels who help us drive sustainable, long-term growth, and profitability. We express our appreciation through:
Policies and programs to identify, develop, retain, and promote talent from within our workforce;
Our management incentive plan and long-term incentive plan providing for cash and equity bonuses to employees to help incentivize employee productivity, which contributes to our success;
Our policies intended to provide equal opportunity for all employees and job applicants without regard to race, ethnicity, religion, sex, sexual orientation, age, disability, national origin, marital status, citizenship status, protected veteran status, genetic information, gender identity, or any other basis prohibited by applicable law; and
Opportunities given to employees so they may serve their communities through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program.
Community
At Sallie Mae, we are passionate about getting involved and giving back in the communities where we live and work. We strive to help create brighter futures by working directly withnot-for-profit organizations such as Big Brothers Big Sisters, Special Olympics, and Folds of Honor. Sallie Mae employees regularly volunteer in their communities, collecting and donating gifts to local families, educating grade school students on financial literacy and consumer finance, and packing meals for families in need.
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CORPORATE GOVERNANCE
management, and lighting systems, and (iii) employee vehicles. For example, the Company uses at its corporate headquarters (i) an environmentally friendly storm water management system with natural water filtration, (ii) a high efficiency andeco-friendly HVAC system, (iii) motion sensor lighting and water valves, (iv) LED fixtures for parking lot lighting, and (v) electric charging stations for employee electric vehicles. These initiatives will help us reduce our annual waste water production and greenhouse gas emissions and ultimately reduce our operating costs. In the future, we intend to continue to search for ways to reduce our carbon footprint and overall environmental impact.
More broadly, our country’s environmental challenges are better and more meaningfully understood and addressed with a more educated population. Sallie Mae is proud of the role we play in building a more educated and sustainable tomorrow.
Our current policy on political activities is publicly available on our website atwww.salliemae.com under “For Investors” and sets forth the principles regarding our stance on political activities. We comply with federal, state, and local lobbying registration and disclosure requirements, and we do not engage in grassroots lobbying. We work closely with the NGC Committee to review and reconsider our existing policies, procedures, and decision-making approaches to government relations and political activities.
At this time, we have one long-term, experienced employee engaged in lobbying activities exclusively related to matters that directly or indirectly affect the Private Education Loan industry and our mission. The compensation of the employee, and other executives, for time attributed to lobbying activity is reported as lobbying expenditure. That employee manages one external, bipartisan lobbying/consulting firm that assists with the same objectives, and we report the expenditures made to this firm in our lobbying disclosures. Our involvement with industry associations is limited to those associations comprised of financial institutions with similar interests.
Quarterly disclosures detailing our lobbying activities and expenditures, as required by the Lobbying Disclosure Act of 1995, are posted online by the Clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate. Disclosures relating to contributions by our Political Action Committee are posted online by the Federal Election Commission (“FEC”). We will continue to comply with all applicable laws and regulations on disclosure of those activities.
At this time, we do not believe the preparation and dissemination of any additional reports on these matters would provide any meaningful information to our stockholders. We will continue to consider the value to stockholders of additional reporting of our political activities as our activities evolve, and review this matter periodically with the NGC Committee.
The Sallie Mae Political Action Committee (“PAC”)
In June 2015, we formed the Sallie Mae PAC. All of the assets and activities of its predecessor prior to theSpin-Off (the“Spin-Off”) of Navient in April 2014 were assumed and taken over by Navient in connection with theSpin-Off.
Our PAC is governed by an Advisory Board comprised of six employees, who represent different divisions within the Sallie Mae organization. The PAC’s Advisory Board reviews and approves all PAC and corporate political contributions. The PAC’s Advisory Board evaluates candidates on the basis of their views on issues that impact us or our employees. It also takes note of whether our facilities or employees reside in a candidate’s district or state.
Our PAC contributions are published on the FEC website.
Stockholder Communications with the Board
Stockholders and other interested parties may submit communications to the Board of Directors, thenon-management directors as a group, the Lead Independent Director, or any other individual member of the Board of Directors by contacting the Lead Independent Director in writing atcorporatesecretary@salliemae.com or c/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
We have a Code of Business Conduct that applies to Board of Directors members and all employees. The Code of Business Conduct is available on our website (www.salliemae.com under “For Investors”) and a written copy is available from the Corporate Secretary. We intend to post amendments to or waivers of the Code of Business Conduct, if any (to the extent applicable to the Company’s chief executive officer, principal financial officer, principal accounting officer, or any director), at this location on our website.
2019 Proxy Statement —SLM CORPORATION 21
REPORTOFTHE AUDIT COMMITTEEOFTHE BOARDOF DIRECTORS
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee hereby reports as follows:
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Audit Committee
Jed H. Pitcher,Chair
Paul G. Child
Marianne M. Keler
Jim Matheson
Vivian C. Schneck-Last
Robert S. Strong
William N. Shiebler
Kirsten O. Wolberg
Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under ourBy-Laws, the Board of Directors has the authority to determine the size of the Board of Directors within that range and to fill any vacancies that may arise prior to the next annual meeting of stockholders. The Board of Directors has set the number of members at 12.
Biographical information, qualifications, and experience with respect to each director nominee appear below. In addition to fulfilling the general criteria for director nominees described in the section titled “Nominations Process,” each nominee possesses experience, skills, attributes, and other qualifications the Board of Directors has determined support its oversight and management of Sallie Mae’s business, operations, and structure. These qualifications are discussed below, along with biographical information regarding each director nominee, including each individual’s age, principal occupation, and business experience during the past five years. Information concerning each director nominee is based in part on information received from the respective director nominee and in part from Sallie Mae’s records.
All nominees appearing below have consented to being named in this proxy statement and to serve if elected. Should any nominee subsequently decline or be unable to accept such nomination to serve as a director, the Board of Directors may designate a substitute nominee or the persons voting the shares represented by proxies solicited hereby may vote such shares for a reduced number of nominees. If the Board of Directors designates a substitute nominee, persons named as proxies will vote“FOR” that substitute nominee.
OurBy-Laws provide the election of a director in an uncontested election will be by a majority of the votes cast with respect to a nominee at a meeting for the election of directors at which a quorum is present. Each share of Common Stock is entitled to one vote for each nominee. A director nominee will be elected to the Board of Directors if the number of shares voted“FOR” the nominee exceeds the number of votes cast“AGAINST” the nominee’s election. Abstentions and shares not voted on the proposal, including brokernon-votes, are of no effect.
If any director nominee fails to receive a majority of the votes cast“FOR” his or her election, such nominee will automatically tender his or her resignation upon certification of the election results. The Nominations, Governance and Compensation Committee (the “NGC Committee”) of the Board of Directors will make a recommendation to the Board of Directors on whether to accept or reject such nominee’s resignation. The Board of Directors will act on the NGC Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of certification of the election results.
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PROPOSAL 1—ELECTIONOF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
PAUL G. CHILD Former Office Managing Partner, Salt Lake City, Deloitte LLP (Independent) (Lead Director) | Professional Highlights: • Office Managing Partner, Salt Lake City, Deloitte LLP—1995 to 2008; Professional Practice Director, Salt Lake City—1989 to 1995; Audit Partner—1983 to 2008; various positions—1971 to 1983 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2009 to present • Member, Board of Governors, Salt Lake Chamber of Commerce—2002 to 2008 • Director, Mountainwest Capital Network—2002 to 2008 • Director, United Way of Greater Salt Lake—2001 to 2008 | Qualifications: Mr. Child’s leadership roles and experience in the accounting field enable him to bring to the Board of Directors experience in the areas of finance, accounting, financial services, and capital markets.
Director since:April 2014 | ||||||||
MARY CARTER WARREN FRANKE
(Independent) | Professional Highlights: • Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co.—2007 to 2013 • Executive Vice President and Chief Marketing Officer, Chase Card Services—1995 to 2007 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2014 to present • Director, The Warfield Fund—2007 to present • Director, Saint Mary’s School—2014 to present • Director, Hobe Sound Community Chest—2017 to present • Director, Paul’s Place—2014 to 2017 |
Age: 63 Director since:April 2014 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
EARL A. GOODE Chief of Staff to the Governor of Indiana (Independent) (Strategic Planning CommitteeCo-Char) | Professional Highlights: • Chief of Staff to the Governor of Indiana—2006 to 2013; 2017 to present • President, Indianapolis Capital Improvement Board of Managers—2015 to 2016 • Deputy Chief of Staff to the Governor of Indiana—2006 • Commissioner, Department of Administration, State of Indiana—2005 to 2006 • Chairman, Indiana Sports Corporation—2001 to 2006 • President, GTE Information Services and GTE Directories Company—1994 to 2000; President, GTE Telephone Operations North and East—1990 to 1994; President, GTE Telephone Company of the Southwest—1988 to 1990 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2013 to present • Member and Former Chairman, Georgetown College Board of Trustees—2006 to present • Member, Marion County Capitol Improvement Board—2019 to present • Member and Executive Committee, Indianapolis Championship Fund— 2018 to present | Qualifications: Mr. Goode has held several leadership positions in business services and operations. This experience, combined with his involvement in the state political process, enables him to contribute to the Board of Directors in the areas of marketing and product development, business operations, and political and government affairs. Age: 79 Director since:July 2000 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
MARIANNE M. KELER Attorney, Keler & Kershow PLLC (Independent) (Audit Committee Chair) | Professional Highlights: • Attorney, Keler & Kershow PLLC—2006 to present • Executive Vice President, Consumer Finance, Corporate Strategy & Administration, Sallie Mae—2004 to 2006 • Senior Vice President & General Counsel, Sallie Mae; President, Student Loan Marketing Association—1997 to 2004 • Vice President & Associate General Counsel, Student Loan Marketing Association—1990 to 1997; various other positions—1985 to 1997 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2010 to present • Board Chair, Building Hope (charter school lender)—2004 to present • Board Chair, Institute for American Universities—2018 to present • Finance Committee Chair, Institute for American Universities—2008 to 2016; • Board Chair, American University in Bulgaria, EL Haynes Charter School—2008 to 2014 • Member, Georgetown University Board of Regents—2009 to 2015 • Founding Director, National Student Clearinghouse—1993 to 2009 Directorship of other public companies: • CubeSmart (NYSE: CUBE)—2007 to present; Board Chair— 2018 to present | Qualifications: Ms. Keler’s legal background and experience in the student loan industry and with Sallie Mae bring valuable perspective to the Board of Directors in the areas of student and consumer lending, legal and corporate governance, and higher education. Age: 65 Director since:April 2014 | ||||||||
MARK L. LAVELLE Former Senior Vice President, Commerce Cloud, Adobe Inc. (Independent) | Professional Highlights: • Senior Vice President, Commerce Cloud, Adobe Inc.—2018 to 2019 • Chief Executive Officer, Magento Commerce—2015 to 2018 • Senior Vice President, Product, eBay Enterprise 2013 to 2015 • Senior Vice President, Strategy and Partnerships, eBay, Inc.—2012 to 2013 • Senior Vice President, Strategy and Business Development, PayPal, Inc.—2009 to 2012 • Co-Founder and Vice President, Corporate Development, Bill Me Later, Inc.—2001 to 2009 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2019 to present • Director, Armada Inc—2018 to present • Director, Second Chance—2008 to present | Qualifications: Mr. Lavelle’s extensive experience developing and scaling businesses encompassing financial services, commerce, and information technology allows him to provide valuable insight to the Board of Directors in the areas of risk management, strategy, acquisitions, and business operations. Age: 54 Director since:April 2019 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
JIM MATHESON Chief Executive Officer, NRECA (Independent) | Professional Highlights: • Chief Executive Officer, National Rural Electric Cooperative Association—2016 to present • Principal in the Public Policy Practice, Squire Patton Boggs—2015 to 2016 • Member of the United States House of Representatives—2001 to 2015 • Founder of The Matheson Group—1999 to 2000 • Consultant, Energy Strategies, Inc.—1991 to 1998 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2015 to present • Service on the United States House of Representatives Energy and Commerce Committee—2007 to 2015; Science Committee—2001 to 2011; Financial Services Committee—2003 to 2007; and Transportation and Infrastructure Committee—2001 to 2007 • Chief Deputy Whip for the Democratic Caucus of the United States House of Representatives—2011 to 2015 • Board Member, United States Association of Former Members of Congress—2015 to present • Director, United States Global Leadership Coalition—2019 to present | Qualifications:Mr. Matheson’s extensive experience in public policy and financial services enables him to bring to the Board of Directors a valuable perspective in development of business strategies and on public policy and regulatory matters. Age: 60 Director since:March 2015 | ||||||||
FRANK C. PULEO Attorney (Independent) (Risk Committee Chair) | Professional Highlights: • Attorney—2006 to 2016 • Co-Chair, Global Finance Group, Milbank, Tweed, Hadley & McCloy LLP, a law firm—1995 to 2006; Partner—1978 to 2006 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2013 to present • Director, South Street Securities Holdings Inc. (f/k/a CMET Finance)—2008 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Director, CIFC Corporation—2006 to 2014 Directorships of other public companies: • Apollo Investment Corporation—2007 to present | Qualifications: Mr. Puleo’s background as a corporate and finance attorney enables him to bring analytical, legal, and financial insight to the Board of Directors in the areas of financial services, capital markets transactions, and corporate governance. Age: 74 Director since:March 2008 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
VIVIAN C. SCHNECK-LAST Former Managing Director, (Independent) | Professional Highlights: • Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to 2014 • Managing Director, Global Head of Technology Business Development, Goldman Sachs & Company—2000 to 2014 • Managing Director, Global Head of Technology Vendor Management, Goldman Sachs & Company—2003 to 2014 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2015 to present • Advisor/Director, Portrait Capital Systems, LLC—2015 to 2019 • Advisor/ Director, Coronet—2015 to present • Director, Bikur Cholim of Manhattan—2014 to present Directorships of other public companies: • SCVX—2020 to present | Qualifications: Ms. Schneck-Last’s strategic technology experience and background in technology governance in the financial services field bring valuable perspective to the Board of Directors in risk management and on a broad range of enterprise technology matters. Age: 59 Director since:March 2015 | ||||||||
WILLIAM N. SHIEBLER Private Investor (Independent) (NGC Committee Chair) | Professional Highlights: • Private Investor—2007 to present • Chief Executive Officer of the Americas, Deutsche Asset Management (Deutsche Bank)—2002 to 2007 • President and Chief Executive Officer, Putnam Mutual Funds; Senior Managing Director, Putnam Investments—1990 to 1999 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2010 to present • Trustee, Buffalo Bill Center of the West in Cody, WY—2007 to present; Elected as Vice Chairman and Chairman Elect—2019; Chairman—2020 Directorships of other public companies: • Calamos Asset Management, Inc.—2012 to 2017 • OXiGENE, Inc.—2002 to 2012 • MasTec Inc.—2001 to 2004 | Qualifications: Mr. Shiebler’s extensive experience in the financial services industry and with other public companies allows him to provide valuable insight to the Board of Directors in the areas of finance, portfolio management, and business operations. Age: 78 Director since:April 2014 |
2020 Proxy Statement —SLM CORPORATION 7
PROPOSAL 1—ELECTIONOF DIRECTORS
ROBERT S. STRONG Former Managing Director, Chairman, Capital (Independent) (Compliance Committee Chair) (Preferred Stock Committee Chair) | Professional Highlights: • Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to 2007 • Managing Director, Portfolio Management, Bank of America Securities—2001 to 2006 • Executive Vice President, Chief Credit Officer, JP Morgan Chase Bank—1996 to 2001 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2014 to present • Director, Syncora Guaranty, Inc.—2018 to present • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Member, Financial Policy Review Board for the State of New Jersey—2013 to 2016 • Director, CamberLink Inc.—2013 to 2016 | Qualifications: Mr. Strong’s extensive experience in the banking and financial services industries allows him to provide valuable insight to the Board of Directors in the areas of finance, risk management, portfolio management, and business operations. Age: 71 Director since:April 2014 | ||||||||
JONATHAN W. WITTER Chief Executive Officer, Sallie Mae (Executive; Not Independent) | Professional Highlights: • Chief Executive Officer and Director, Sallie Mae—April 2020 to present • Executive Vice President and Chief Customer Officer, Hilton Worldwide Holdings—April 2017 to April 2020 • President—Retail and Direct Banking, Capital One Financial Corporation—February 2012 to March 2017 • President—Retail and Small Business Banking, Capital One Financial Corporation—September 2011 to February 2012 • Executive Vice President—Retail Banking, Capital One Financial Corporation—December 2010 to September 2011 • Chief Operating Officer—Retail Banking Group and President, Morgan Stanley Private Bank—2009 to December 2010 • Executive Vice President and Head of General Bank Distribution, Wachovia (now Wells Fargo & Company)—2004 to 2009 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—April 2020 to present | Qualifications: Mr. Witter’s extensive background and significant leadership experience in the banking industry and his customer experience expertise allow him to provide business and leadership insight to the Board of Directors in the areas of banking, financial services, capital markets, business operations and customer service. Age: 50 Director since:April 2020 |
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PROPOSAL 1—ELECTIONOF DIRECTORS
KIRSTEN O. WOLBERG Chief Technology and (Independent) | Professional Highlights: • Chief Technology and Operations Officer, DocuSign—2017 to present • Vice President, PayPal Separation Executive, PayPal, Inc.—2014 to 2017 • Vice President, Technology, PayPal, Inc.—2012 to 2014 • Chief Information Officer, Salesforce.com—2008 to 2011 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2016 to present • Vice President, Corporate Technology, Charles Schwab & Co.—2001 to 2008 • Director, Year Up—2008 to present • Director, Jewish Vocational Services—2014 to present Directorships of other public companies: • Silicon Graphics International Corp.—2016 | Qualifications: Ms. Wolberg’s extensive experience in information technology for the financial services industry allows her to provide valuable insight to the Board of Directors in the areas of finance, information technology risks, and business operations. Age: 52 Director since:November 2016 |
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE ELECTION OF THE TWELVE NOMINEES NAMED ABOVE. |
2020 Proxy Statement —SLM CORPORATION 9
PROPOSAL 2—ADVISORY VOTEON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Sallie Mae is asking stockholders to approve an advisory resolution (commonly referred to as a“say-on-pay” resolution) on its executive compensation as reported in this proxy statement. Sallie Mae urges stockholders to read the “Compensation Discussion and Analysis” section (“CD&A”) of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of Sallie Mae’s named executive officers (“NEOs”).
At our annual meeting of stockholders held in June 2019, we submitted anon-binding vote to our stockholders to approve our executive compensation. Approximately 96.0 percent of the stockholders voted in favor of thesay-on-pay proposal. We attribute that broad support in part to our continued efforts to understand and address the feedback we received from our stockholders. Specifically, we continue to focus on performance-based compensation for our NEOs as we (i) tie a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business, and, (ii) award a greater percentage of the NEO’s long-term incentive plan equity award (“LTIP”) in the form of performance stock units (“PSUs”). In 2019, as part of our plan to increase the percentage of compensation tied to performance, we increased the amount of PSUs awarded to NEOs under the LTIP from 25 percent to 50 percent.
The compensation awarded to our former Chief Executive Officer (“CEO”), Raymond J. Quinlan, and other NEOs for 2019 recognizes the positive performance of the Company. The NGC Committee is mindful of its responsibility to align executive compensation with the overall performance of the Company, while taking into consideration the need to provide market competitive compensation in order to recruit and retain highly skilled and experienced executives. The CD&A provides a comprehensive discussion and rationale for the 2019 pay decisions made by the NGC Committee and the correlation to Company performance.
As described in the CD&A, our executive compensation programs are designed to attract, retain, and motivate our NEOs, who are important to our long-term success. Under these programs, we provide our NEOs with appropriate objectives and incentives to achieve our business goals. We believe that our compensation features demonstrate our responsiveness to our stockholders, our commitment to ourpay-for-performance philosophy, and our goal of aligning management’s interests with those of our stockholders to support the creation of long-term value.
The Board of Directors has adopted a policy providing for annual“say-on-pay” advisory votes. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, Sallie Mae is asking stockholders to approve the following advisory resolution at the Annual Meeting:
“Resolved, that Sallie Mae’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis and the related compensation tables and narrative disclosure in this proxy statement.”
This proposal to approve the resolution regarding the compensation of Sallie Mae’s NEOs requires the affirmative vote of the holders of a majority of the Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGC Committee or the Board of Directors. However, the NGC Committee will, as it has done in the past, carefully evaluate the outcome of the vote when considering future executive compensation decisions.
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE RELATED COMPENSATION TABLES AND NARRATIVE DISCLOSURE IN THIS PROXY STATEMENT. |
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PROPOSAL 3—RATIFICATIONOFTHE APPOINTMENTOFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Sallie Mae’s independent registered public accounting firm, KPMG LLP (“KPMG”), is selected by the Audit Committee of Sallie Mae’s Board of Directors (the “Audit Committee”). The Audit Committee has engaged KPMG as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2020. Representatives of KPMG are expected to be present at the Annual Meeting, and they will have the opportunity to respond to appropriate questions from stockholders and to make a statement if they desire to do so.
This proposal is put before the stockholders because the Board of Directors believes it is a good corporate governance practice to provide stockholders a vote on ratification of the selection of the independent registered public accounting firm.
For ratification, this proposal will require the affirmative vote of the holders of a majority of the shares of Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the basis for the stockholders’ vote when determining whether to continue the firm’s engagement. Even if the selection of Sallie Mae’s independent registered public accounting firm is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during 2020 if, in its discretion, it determines such a change would be in the Company’s best interests.
Board of Directors Recommendation
✓ | THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR”RATIFICATION OF THE APPOINTMENT OF KPMG AS SALLIE MAE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020. |
2020 Proxy Statement —SLM CORPORATION 11
CORPORATE GOVERNANCE
Roles and Responsibilities of the Board of Directors
The Board of Directors believes strong corporate governance is critical to achieving Sallie Mae’s performance goals and to maintaining the trust and confidence of investors, employees, regulatory agencies, and other stakeholders.
The primary responsibilities of the Board of Directors are to:
Review Sallie Mae’s long-term strategies and set long-term performance metrics;
Review risks affecting Sallie Mae and its processes for managing those risks, and oversee assignment of various aspects of risk management, compliance, and governance;
Select, evaluate, and compensate the CEO and our NEOs;
Plan for succession of the CEO and members of the executive management team;
Review and approve Sallie Mae’s annual business plan and multi-year strategic plan, and periodically review performance against such plans;
Review and approve major transactions and business initiatives;
Through its Audit Committee, select and oversee Sallie Mae’s independent registered public accounting firm;
Recommend director candidates for election by stockholders; and
Evaluate its own effectiveness.
The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the NGC Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published atwww.salliemae.com under “For Investors,” and a written copy may be obtained by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, DE 19713. The Guidelines, along with Sallie Mae’sBy-Laws, embody the following governance practices, among others:
A majority of the members of the Board of Directors must be independent directors, and all members of the Audit and NGC Committees must be independent.
All directors stand forre-election each year. Directors are elected under a majority vote standard in uncontested elections.
We have historically combined the roles of Chairman of the Board of Directors and CEO; however, as set forth in greater detail in the Section titled “Board Leadership Structure,” as of April 19, 2020, we have separated the role of Chairman of the Board of Directors from CEO, and anticipate maintaining this separation going forward. We also have a Lead Independent Director elected by the Board of Directors.
Each regularly scheduled Board of Directors meeting concludes with an executive session in which only members of the Board of Directors participate. Each regularly scheduled committee meeting also generally concludes with an executive session presided over by the committee Chair.
We maintain stock ownership and retention guidelines for directors and executive officers.
The Board of Directors and its committees conduct performance reviews annually.
The Board of Directors and its committees may engage their own advisors.
On April 19, 2020, in connection with the appointment of Mr. Witter as the Company’s CEO, the Board of Directors adopted a structure separating the Chairman of the Board of Directors from the CEO, which was initially reported in our Form8-K filed on March 5, 2020. Currently, Mr. Quinlan, the Company’s former CEO, serves as the Chairman of the Board of Directors (as well as the Chairman of the Sallie
12 SLM CORPORATION —2020 Proxy Statement
CORPORATE GOVERNANCE
Mae Bank, our wholly-owned subsidiary (the “Bank”) Board of Directors) and will serve in this role until June 18, 2020, at which time Mr. Quinlan will no longer serve on the Board of Directors, and the Board of Directors will appoint one of the Company’s independent directors then in service to serve as the independent Chair of the Board of Directors of the Company, as well as the Chair of the Bank Board of Directors. The Board of Directors believes that, after June 18, 2020, an independent director is best situated to serve as Chair of our Board of Directors and of the Bank Board of Directors to serve as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. The Board of Directors believes that the Company is currently best served by separating the role of Chair and CEO, but the Board of Directors, consistent with the Company’s governance guidelines and subject to the Company’sby-laws, reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at a given point in time. Our Chairman currently serves, and the independent Chair after June 18, 2020 will serve, as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and shareholders. In addition to our separate Chair and CEO structure, the Board of Directors’ governance guidelines provide for a Lead Independent Director to facilitate coordination of the activities of the Company’s independent directors. This position is currently held by Paul Child, an independent director who serves as our Lead Independent Director as well as a member on three of our committees of the Board of Directors: the Audit, Risk, and Strategic Planning Committees. As Lead Independent Director, Mr. Child also attends all meetings held by our Board of Directors’ other committees. Our Lead Independent Director has historically provided strong independent leadership for the Board of Directors.
For a director to be considered independent, the Board of Directors must determine the director does not have any direct or indirect material relationship with Sallie Mae. The Board of Directors has adopted the Guidelines, which embody the corporate governance principles and practices of the Company. The Guidelines include the standards for determining director independence, which conform to the independence requirements of the NASDAQ Global Select Market (“NASDAQ”) listing standards.
The Board of Directors has determined that all of the individuals who served as a director during 2019, other than Mr. Quinlan, our former CEO, and all nominees standing for election at the Annual Meeting, other than Mr. Witter, our current CEO, are independent of Sallie Mae.
Each member of the Board of Directors’ Audit and NGC Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines.
As of December 31, 2019, our Board of Directors consisted of the following:
2020 Proxy Statement —SLM CORPORATION 13
CORPORATE GOVERNANCE
Board, Committee, and Annual Meeting Attendance
Our Board of Directors met nine times in 2019. Each of the then-serving directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which he or she served. Directors are expected to attend the Annual Meeting, and twelve of thirteen of the then-serving members of the Board of Directors attended the Annual Meeting in June 2019. The only director not in attendance at the Annual Meeting in June 2019 was Jed Pitcher, who did not seekre-election to the Board of Directors at the June 2019 Annual Meeting.
Roles of the Board and Its Committees
The Board of Directors has established the following standing committees to assist in its oversight responsibilities: Audit; NGC; Risk; Strategic Planning; and Preferred Stock. Separately, the Bank Board of Directors has also established a Compliance Committee. Each committee is governed by a Board-approved written charter, which is evaluated annually and which sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.
All of our committee charters, including the charter for our NGC Committee, are available atwww.salliemae.com under “For Investors, Corporate governance.” Stockholders may obtain a written copy of any and all committee charters by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
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The following table sets forth the membership and number of meetings held for each committee of the Board of Directors as of December 31, 2019. Mr. Witter has not served on any committees since his appointment to the Board of Directors on April 20, 2020.
Audit(1) | Nominations, Governance and Compensation | Risk(2) | Strategic Planning | Preferred Stock | |||||||||||||||||||||
Paul G. Child(1) (2) (l) (L) | * | * | * | ||||||||||||||||||||||
Mary Carter Warren Franke(2) (I) | * | * | * | ||||||||||||||||||||||
Earl A. Goode+(1) (I) | * | Co-Chair | |||||||||||||||||||||||
Marianne M. Keler(1) (I) | Chair | * | * | ||||||||||||||||||||||
Mark L. Lavelle(2) (I) | * | * | * | ||||||||||||||||||||||
Jim Matheson(I) | * | * | |||||||||||||||||||||||
Frank C. Puleo+(2) (I) | Chair | * | |||||||||||||||||||||||
Raymond J. Quinlan+(C) | Co-Chair | ||||||||||||||||||||||||
Vivian Schneck-Last(2) (I) | * | * | * | ||||||||||||||||||||||
William N. Shiebler+(1) (I) | Chair | * | * | ||||||||||||||||||||||
Robert S. Strong++(1) (2) (I) | * | Chair | |||||||||||||||||||||||
Kirsten O. Wolberg(I) | * | * | |||||||||||||||||||||||
Number of Meetings in 2019 | 10 | 12 | 9 | 2 | 1 |
* | Committee Member |
+ | Also serves as a member of the Bank Compliance Committee. |
++ | Also serves as Chair of the Bank Compliance Committee. |
(C) | Chairman of the Board of Directors |
(I) | Independent Board Member |
(L) | Lead Independent Director |
(1) | The Board of Directors determined Mr. Child, Mr. Goode, Ms. Keler, Mr. Shiebler, and Mr. Strong each qualified as an “Audit Committee Financial Expert” as set forth in Item 407(d)(5) of Regulation |
(2) | The Board of Directors determined Mr. Child, Ms. Franke, Mr. Lavelle, Mr. Puleo, Ms. Schneck-Last, and Mr. Strong each qualified as a “Risk Management Expert” as such term is defined by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the rules and regulations promulgated thereunder. |
2020 Proxy Statement —SLM CORPORATION 15
CORPORATE GOVERNANCE
The Board of Directors and its committees oversee Sallie Mae’s overall strategic direction, including setting risk management philosophy, tolerance and parameters, and establishing procedures for assessing the risks of each business line as well as the risk management practices the management team develops and utilizes. Management escalates to the Board of Directors and/or its committees any significant departures from established tolerances and parameters and reviews new and emerging risks. Throughout the year, the Board of Directors and/or its committees dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail with senior management, including risks related to cybersecurity. The primary risk oversight responsibilities of each of the standing committees of the Board of Directors are as follows:
Audit Committee • review of financial statements and periodic public reports; • sufficiency of internal controls over financial reporting and disclosure controls; • engage and communicate with our independent registered public accounting firm; and • operation of internal audit function, staffing, and work plan. |
• all compensation and benefits for • equity-based compensation plans; • management’s administration of employee benefit plans; • management succession planning; • confirm our incentive compensation practices properly balance risk and reward and do not encourage excessiverisk-taking;
• implement good governance policies and measures for Sallie Mae
• recommend nominees for election to the Board of Directors;
• conduct assessments of the performance of the Board of Directors and its committees; and • review related party transactions. | Risk Committee • monitor our major risk categories, including credit, funding and liquidity, market, compliance, legal, operational, reputational and strategic, as well as our risk management capabilities, including those related to financial product safety, information and data security, privacy, crisis preparedness, business continuity, and disaster recovery plans (which responsibilities include oversight of the Company’s cybersecurity risk, profile assessments, and monitoring, as well as review of the Company’s strategy to mitigate cybersecurity risks); • review, approve, and authorize the terms and conditions of any loan securitization transaction, loan sale, or debt transaction of our Company or our affiliates; • review our risk management framework and supporting governance structure, roles, and responsibilities established by management; • facilitate the distribution of risk-related information provided to the Risk Committee across and among the Board of Directors and its other committees, including cybersecurity and other information security issues, risks, and threats; and • review our risk appetite framework and conduct regular reviews of key risk measures. | Strategic Planning Committee • engage the CEO and senior management in the strategic planning process and recommend proposals regarding the Company’s long-term strategic initiatives. | Preferred Stock Committee • monitor and evaluate our business activities in light of the rights of holders of the Company’s preferred stock. |
The Bank Committees |
All members of the Board of Directors also serve as members of the board of directors of the Bank and its committees. Our Audit, |
16 SLM CORPORATION —2020 Proxy Statement
CORPORATE GOVERNANCE
The NGC Committee considers for nomination to the Board of Directors candidates recommended by stockholders and members of the Board of Directors. The candidates are evaluated based on the needs of the Board of Directors and Sallie Mae at that time. The Board of Directors seeks representation that reflects gender, ethnic, and geographic diversity. The minimum qualifications and attributes the NGC Committee believes a director nominee must possess include:
Knowledge of the business of Sallie Mae;
Proven record of accomplishment;
Willingness to commit the time necessary for Board of Directors service;
Integrity and sound judgment in areas relevant to the business;
Impartiality in representing stockholders;
Ability to challenge and stimulate management; and
Independence.
To recommend a candidate, stockholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chair of the NGC Committee atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713. The stockholder should also include his or her contact information and a statement of his or her share ownership. The nomination deadline for the 2020 Annual Meeting has now closed. A stockholder wishing to nominate a candidate must comply with the notice and other requirements described under “Stockholder Proposals for the 2021 Annual Meeting” in this proxy statement.
Sallie Mae has a written policy regarding review and approval of related party transactions. Transactions covered by the policy are transactions involving Sallie Mae in excess of $120,000 in any year in which any director, nominee, executive officer, or greater-than-five percent beneficial owner of the Company, or any of their respective immediate family members, has or had a direct or indirect material interest, other than solely as a director and/orless-than-ten percent owner of an entity involved in the transaction (“Related Party Transactions”). Loans made in the ordinary course of Sallie Mae’s business to executive officers, directors, and their family members are considered Related Party Transactions and arepre-approved. Moreover, the Bank has also adopted written policies to implement the requirements of Regulation O of the Board of Governors of the Federal Reserve System, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be, and are, approved by the Board of Directors of the Bank. In 2019, the Company issued a credit card to Mr. Thome with a total of $10,000 of credit extended to him. Such credit card was issued in the ordinary course of business; is on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company; and does not involve more than the normal risk of collectability or present other features unfavorable to the Company. Since January 1, 2019, we have not had any other transactions with related persons required to be disclosed under Item 404(a) of RegulationS-K, and no such transactions are currently proposed.
Under the Related Party Transactions policy, the General Counsel will notify the Chair of the NGC Committee of any proposed Related Party Transaction, and the Chair of the NGC Committee will determine if approval under the policy is required. If required, the NGC Committee will then review the proposed Related Party Transaction and make a recommendation to the Board of Directors regarding whether to approve the transaction. In considering a transaction, the NGC Committee takes into account whether a transaction would be on terms no less favorable than to an unaffiliated third-party under the same or similar circumstances, among other factors.
Environmental, Social and Governance Practices
In conducting our business, we continually pursue practices that we believe will drive sustainable, long-term growth and profitability. Such “environmental, social and governance” or “ESG” practices mean different things to different investors and to the organizations that evaluate and rate ESG practices. For us, ESG practices mean we embrace the core principles of corporate responsibility and social purpose through everything we do for our customers, employees, communities, and environment. Our actions are shaped by our mission and purpose—helping families achieve the dream of a higher education. As an application of ESG practices, the Global Reporting Initiative Standards, the
2020 Proxy Statement —SLM CORPORATION 17
CORPORATE GOVERNANCE
Sustainability Accounting Standards Board, and the United Nations Sustainable Development Goals (“SDGs”) are considered a roadmap for corporations to serve the long-term goals of society. These SDGs include SDG4-Quality Education (“SDG 4”), which aims to ensure inclusive and quality education for all. We support the general goals of SDG 4 and agree that education is one of the most powerful and proven vehicles for sustainable development. We support the goal of universal access to quality higher education, whether it be for a degree program, continuing education, or certificate training.
At its core, education creates opportunities for individuals to realize their dreams, succeed, and lead more fulfilling and purposeful lives. Those who attend and graduate from college move forward with a wide range of personal, financial, and other lifelong benefits, including an ability to positively affect the outcomes of our most significant societal challenges.
ESG at a Glance
We describe some of our key ESG practices in this section, but more details regarding ESG can be found in our inaugural Corporate Social Responsibility Report (“CSR Report”) that was published in March 2020 and available on our website athttp://www.salliemae.com/csr. The CSR Report is not incorporated by reference herein, and is not a part of this proxy statement or the 2019 Form10-K.
Our Customers
As the premier financial brand for college and continuous education, we are in the business of building prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Along with a company-wide commitment to honesty, dependability, and integrity, we are committed to:
Offering our customers a diversified set of fairly priced products;
Increasing our customers’ long-term financial stability;
Treating our customers and partners with respect;
Rewarding successful customer credit management(on-time payment incentive);
Contributing time and resources to improving our community; and
Creating a work environment that enables our employees to reach their potential.
These commitments form the foundation of our mutual success. In addition, we are committed to helping our next generation make informed decisions about their education. After all, education in all forms is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility.
Human Capital Management and Talent Development
We value our highly-skilled employees at all levels who help us drive sustainable, long-term growth, and profitability. We express our appreciation through:
Policies and programs to identify, develop, retain, and promote talent from within our workforce;
Our management incentive plan and long-term incentive plan providing for cash and equity bonuses to employees to help incentivize employee productivity, which contributes to our success;
Our policies intended to provide equal opportunity for all employees and job applicants without regard to race, ethnicity, religion, sex, sexual orientation, age, disability, national origin, marital status, citizenship status, protected veteran status, genetic information, gender identity, or any other basis prohibited by applicable law; and
Opportunities given to employees so they may serve their communities through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program.
Community
At Sallie Mae, we are passionate about getting involved and giving back in the communities where we live and work. We strive to help create brighter futures by working directly withnot-for-profit organizations such as Big Brothers Big Sisters, Special Olympics, and Folds of Honor. Sallie Mae employees regularly volunteer in their communities, collecting and donating gifts to local families, educating grade school students on financial literacy and consumer finance, and packing meals for families in need.
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Environmental Stewardship and Attention to Climate Change
We continue to make improvements at our facilities as we are committed to improving the environmental sustainability of our business by using resources and materials thoughtfully, all of which have a positive environmental impact on the communities in which we operate. More broadly, our country’s environmental challenges are better and more meaningfully understood and addressed by an educated population. Sallie Mae is proud of the role we play in building a more educated and sustainable tomorrow.
Our current policy on political activities is publicly available on our website atwww.salliemae.com under “For Investors” and sets forth the principles regarding our stance on political activities. We comply with federal, state, and local lobbying registration and disclosure requirements, and we do not engage in grassroots lobbying. We work closely with the NGC Committee to review and reconsider our existing policies, procedures, and decision-making approaches to government relations and political activities.
At this time, we have one long-term, experienced employee engaged in lobbying activities exclusively related to matters that directly or indirectly affect the Private Education Loan industry and our mission. The compensation of the employee, and other executives, for time attributed to lobbying activity is reported as lobbying expenditure. That employee manages one external, bipartisan lobbying/consulting firm that assists with the same objectives, and we report the expenditures made to this firm in our lobbying disclosures. Our involvement with industry associations is limited to those associations comprised of financial institutions with similar interests.
Quarterly disclosures detailing our lobbying activities and expenditures, as required by the Lobbying Disclosure Act of 1995, are posted online by the Clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate. Disclosures relating to contributions by our Political Action Committee are posted online by the Federal Election Commission (“FEC”). We will continue to comply with all applicable laws and regulations on disclosure of those activities.
At this time, we do not believe the preparation and dissemination of any additional reports on these matters would provide any meaningful information to our stockholders. We will continue to consider the value to stockholders of additional reporting of our political activities as our activities evolve, and review this matter periodically with the NGC Committee.
The Sallie Mae Political Action Committee (“PAC”)
In June 2015, we formed the Sallie Mae PAC. All of the assets and activities of its predecessor prior to theSpin-Off (the“Spin-Off”) of Navient Corporation (“Navient”) in April 2014 were assumed and taken over by Navient in connection with theSpin-Off.
Our PAC is governed by an Advisory Board comprised of six employees, who represent different divisions within the Sallie Mae organization. The PAC’s Advisory Board reviews and approves all PAC and corporate political contributions. The PAC’s Advisory Board evaluates candidates on the basis of their views on issues that impact us or our employees. It also takes note of whether our facilities or employees reside in a candidate’s district or state.
Our PAC contributions are published on the FEC website.
Stockholder Communications with the Board
Stockholders and other interested parties may submit communications to the Board of Directors, thenon-management directors as a group, the Lead Independent Director, or any other individual member of the Board of Directors by contacting the Lead Independent Director in writing atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
We have a Code of Business Conduct that applies to Board of Directors members and all employees. The Code of Business Conduct is available on our website (www.salliemae.com under “For Investors”) and a written copy is available from the Corporate Secretary. We intend to post amendments to or waivers of the Code of Business Conduct, if any (to the extent applicable to the Company’s chief executive officer, principal financial officer, principal accounting officer, or any director), at this location on our website.
2020 Proxy Statement —SLM CORPORATION 19
REPORTOFTHE AUDIT COMMITTEEOFTHE BOARDOF DIRECTORS
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee hereby reports as follows:
1. | Management has the primary responsibility for the financial statements and the reporting process, including the system of |
2. |
|
3. | The Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB, regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence. |
4. | The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company’s website atwww.salliemae.com under “For Investors.” |
5. | The Audit Committee’s charter requires thepre-approval by the Audit Committee of all fees |
6. |
|
Audit Committee
Marianne M. Keler, Chair
Paul G. Child
Mary Carter Warren Franke
Mark L. Lavelle
Jim Matheson
Vivian C. Schneck-Last
20 SLM CORPORATION —2020 Proxy Statement
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ACCOUNTING FIRM
Independent Registered Public Accounting Firm Fees for 2019 and 2018
Aggregate fees billed for services performed for Sallie Mae by its independent accountant, KPMG, for fiscal years ended December 31, 2019 and 2018, are set forth below.
2019 | 2018 | |||||||
Audit Fees | $ | 2,110,910 | $ | 1,954,495 | ||||
Audit-Related Fees | $ | 546,000 | $ | 711,000 | ||||
Tax Fees | — | $ | 42,375 | |||||
All Other Fees | — | — | ||||||
Total | $ | 2,656,910 | $ | 2,707,870 |
Audit Fees. Audit fees include fees for professional services rendered for the audits of the consolidated financial statements of Sallie Mae and statutory and subsidiary audits, issuance of comfort letters, consents, income tax provision procedures, and assistance with review of documents filed with the SEC.
Audit-Related Fees. Audit-related fees include fees for assurance and other services related to service provider compliance reports, trust servicing and administration reports, internal control reviews, and attest services that are not required by statute or regulation.
Tax Fees. Tax fees include fees for federal and state tax compliance, and tax consultation services.
All Other Fees. All other fees for the fiscal year ended December 31, 2019 were $0. All other fees for the fiscal year ended December 31, 2018 were $0.
Pre-Approval Requirements
The Audit Committee’s charter addresses the approval of audit andnon-audit services to be provided by the independent registered public accounting firm to the Company. The Audit Committee’s charter requires all services to be provided by our independent registered public accounting firm bepre-approved by the Audit Committee or its Chair. Each approval of the Audit Committee or the Chair of the Audit Committee must describe the services provided and set a dollar limit for the services. The Audit Committee, or its Chair,pre-approved all audit andnon-audit services provided by KPMG during 2019. Reporting is provided to the Audit Committee regarding services the Chair of the Audit Committeepre-approved between committee meetings. The Audit Committee receives regular reports from management regarding the actual provision of all services by KPMG. No services provided by our independent registered public accounting firm were approved by the Audit Committee pursuant to the “de minimis” exception to thepre-approval requirement set forth in paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.
2020 Proxy Statement —SLM CORPORATION 21
OWNERSHIPOF COMMON STOCKBY 5 PERCENTOR MORE HOLDERS
OWNERSHIP OF COMMON STOCK BY 5 PERCENT OR MORE HOLDERS
The following table provides information about each stockholder known to Sallie Mae to beneficially own five percent or more of the outstanding shares of our Common Stock, based solely on the information filed by each such stockholder in 2020 for the year ended December 31, 2019 on Schedule 13G/A or on Schedule13F-HR, as applicable, under the Exchange Act.
Name and Address of Beneficial Owner | Shares(1) | Percent(1) | ||||||||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 39,923,855 | 9.5% | ||||||||
The Vanguard Group, Inc.(3) 100 Vanguard Blvd. Malvern, PA 19355 | 39,270,863 | 9.3% | ||||||||
ValueAct Holdings, L.P.(4) 1 Letterman Drive, Building D, 4th Floor San Francisco, CA 94129 | 39,184,254 | 9.3% | ||||||||
T. Rowe Price Associates, Inc.(5) 100 E. Pratt Street Baltimore, MD 21202 | 23,639,245 | 5.5% | ||||||||
CI Investments Inc.(6) 2 Queen Street East, 20th Floor Toronto, Canada A6 M5C 3G7 | 21,914,233 | 5.2% |
(2) | Information is as of December 31, 2019 and is based upon a Schedule 13G/A, filed with the SEC on February 6, 2020, by BlackRock, Inc., a Delaware corporation. The reporting entity reported the sole power to vote or direct the voting for 38,005,918 shares of |
(3) | Information is as of December 31, |
(4) | Information is as of December 31, 2019 and is based upon a Schedule |
(5) | Information is as of December 31, 2019 and is based upon a Schedule 13G/A, filed with the SEC on February 14, 2020, by T. Rowe Price Associates, Inc., a Maryland corporation. The reporting entity reported the sole power to vote or |
Name and Address of Beneficial Owner | Shares(1) | Percent(1) | ||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 43,240,757 | 9.9% | ||
ValueAct Capital Master Fund, L.P. and its related entities(3) 1 Letterman Drive, Building D, 4th Floor San Francisco, CA 94129 | 37,605,408 | 8.6% | ||
Barrow, Hanley, Mewhinney & Strauss, LLC(4) 2200 Ross Avenue 31st Floor Dallas, TX 75201-2761 | 31,303,199 | 7.2% | ||
T. Rowe Price Associates, Inc.(5) 100 E. Pratt Street Baltimore, MD 21202 | 30,147,259 | 6.9% | ||
FMR LLC and Abigail P. Johnson(6) 245 Summer Street Boston, MA 02210 | 29,595,693 | 6.8% | ||
The Vanguard Group, Inc.(7) 100 Vanguard Blvd. Malvern, PA 19355
| 27,507,638
| 6.3%
|
(6) |
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the beneficial ownership of Sallie Mae’s Common Stock by: (i) our current directors and nominees; (ii) the Named Executive Officers listed in the Summary Compensation Table; and (iii) all of the Company’s current directors and executive officers as a group. Under SEC rules, beneficial ownership for purposes of this table takes into account shares as to which the individual has or shares voting and/or investment power as well as shares that may be acquired within 60 days (such as by exercising vested stock options). Information is provided as of February 28, 2020, unless noted otherwise. As of February 28, 2020, the Company had 419,962,492 outstanding shares of Common Stock. The beneficial owners listed have sole voting and investment power with respect to shares beneficially owned, except as to the interests of spouses or as otherwise indicated.
|