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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
S
e
curities Exchange A
c
t of 1934
 
 
Filed by the Registrant  
                             Filed by a party other than the Registrant  
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to
Section 240.14a-12
SLM Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required
 
Fee paid previously with preliminary materials
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11
 
 
 


LOGO

 

300 Continental Drive

Newark, Delaware 19713

April 27, 2023

 

LOGO   

Dear Fellow Stockholders:

 

We executed on our strategic imperatives and grew our core business in 2022 –increasing originations, expanding net interest margin, returning a significant amount of capital to shareholders, and rigorously managing expenses

in an uncertain macroeconomic environment. While credit performance remains a focus, the overall strength of our franchise and investments in our processes, programs, and people position us to deliver continued shareholder value and long-term success.

We’re charting an ambitious course at Sallie Mae as the market leader for private student lending, but our mission and purpose is much greater. We’re an education solutions company, helping students and families navigate to, through, and immediately after college.

I’m pleased we’ve already hit the ground running in 2023, and we are seeing positive outcomes and momentum on multiple fronts. We expect the private student lending market to return to a more normalized growth rate, our originations engine is strong, and prepayment speeds continue to slow, which bodes well for balance sheet growth or continued loan sales. The acquisition of Nitro College, a digital marketing and education solutions company, has further jumpstarted our efforts to reach more students and families and expand our Education Services lines of business.

We’re also deepening our relationships with Historically Black Colleges and Universities (HBCUs) and continue to offer our own scholarship programs to help students from all backgrounds access and complete higher education. Our Bridging the Dream Scholarship Program, in partnership with Thurgood Marshall College Fund, is part of the three-year, $3 million commitment to open the doors of higher education to students from underserved communities. To date, 600 scholarships totaling $2 million have been awarded.

This work, along with our commitment to the environment and strong risk controls and governance, is highlighted in our Environmental, Social, and Governance Report published in April 2023 and available at www.salliemae.com/esg.

We understand we cannot deliver for our customers without also delivering for our stockholders. Our investment thesis remains simple: we seek to (i) provide attractive growth through a focus on market share and operating leverage, (ii) expertly allocate and return capital to stockholders, and (iii) manage risk. We continue to align the interest of our team members with this long-term valuation orientation.

I look forward to you joining me at the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) on Tuesday, June 20, 2023, at 1 p.m. Eastern Daylight Time to be held virtually via the Internet at www.virtualshareholdermeeting.com/SLM2023.

Details of the business to be conducted at the Annual Meeting and how to participate at the 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. 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 and confidence in Sallie Mae.

All best,

 

 

LOGO

Jonathan W. Witter

Chief Executive Officer

 

 

2023 PROXY STATEMENT          


 

Notice of 2023

Annual Meeting of Stockholders

 

LOGO

Items of Business:

 

LOGO  

PROPOSAL 1—

Elect 12 directors nominated by the Sallie Mae Board of Directors (the “Board of Directors” or the “Board”), each for a one-year term, to serve until their successors have been duly elected and qualified;

 

LOGO  

PROPOSAL 2—

Approve, on an advisory basis, Sallie Mae’s executive compensation;

 

LOGO  

PROPOSAL 3—

Approve, on an advisory basis, the frequency of future advisory votes on Sallie Mae’s executive compensation;

 

LOGO  

PROPOSAL 4—

Ratify the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the year ending December 31, 2023; and

 

LOGO  

OTHER BUSINESS—

Transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

 

2023 Virtual Annual Stockholder Meeting

After careful consideration, the Board of Directors has determined to hold a virtual annual meeting in order to facilitate stockholder attendance and participation by enabling stockholders to participate from any location and at no cost. We believe this is the right choice for Sallie Mae at this time, as it enables engagement with our stockholders, regardless of size, resources, or physical location. We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting, including submitting questions. You will be able to attend the meeting online, vote your shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/SLM2023. To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card, or voting instruction form. The meeting webcast will begin promptly at 1:00 p.m., Eastern Daylight Time. We encourage you to log in and access the meeting at least 15 minutes prior to the start time.

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 21, 2023, will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. On April 21, 2023, 242,378,966 shares of Common Stock were outstanding and eligible to be voted.

By order of the Board of Directors

 

 

LOGO

Richard M. Nelson

Corporate Secretary

April 27, 2023

 

2023 PROXY STATEMENT          


Table of Contents

 

Proxy Statement Summary

     1  

Overview of Proposals

     3  

Proposal 1

Election of Directors

     4  

Proposal 2

Advisory Vote on Executive Compensation

     12  

Proposal 3

Advisory vote on the Frequency of Future Advisory Votes on Executive Compensation;

     13  

Proposal 4

Ratification of the Appointment of the Independent Registered Public Accounting Firm

     14  

Corporate Governance

     15  

Roles and Responsibilities of the Board of Directors

     15  

Board Governance Guidelines

     15  

Board Leadership Structure

     16  

Director Independence

     16  

Board Diversity

     16  

Board Skills and Experience

     18  

Board, Committee, and Annual Meeting Attendance

     18  

Roles of the Board and Its Committees

     18  

Risk Oversight

     20  

Nominations Process

     21  

Related Party Transactions

     21  

Environmental, Social, and Governance Practices

     21  

Political Expenditures

     22  

The Sallie Mae Political Action Committee (“PAC”)

     23  

Stockholder Communications with the Board

     23  

Code of Business Conduct

     23  

Report of the Audit Committee of the Board of Directors

     24  

Independent Registered Public Accounting Firm

     25  

Independent Registered Public Accounting Firm Fees for 2022 and 2021

     25  

Pre-Approval Requirements

     25  

Ownership of Common Stock by 5 Percent or More Holders

     26  

Ownership of Common Stock by Directors and Executive Officers

     27  

Executive Officers

     28  

Executive Compensation

     30  

Compensation Discussion and Analysis

     30  

CD&A Roadmap

     30  

Executive Summary

     31  

Compensation Philosophy

     32  

Named Executive Officers

     32  

Compensation Practices Summary

     33  

Stockholder Engagement & Say-on-Pay Results

     34  

Stock Performance

     35  

Highlights of Company Performance

     35  

Allocation of Compensation

     36  

Elements of Compensation

     37  

How Our Compensation Decisions Are Made

     38  

2022 Annual Incentive Plan for Named Executive Officers

     40  

2022 AIP Funding and Payout Computation

     41  

2022 NEO Long-Term Incentive Program

     43  

NEO Achievements

     44  

Vesting of the 2019 PSU Grants

     45  

Risk Assessments and Attestations of Compensation Plans

     47  

Compensation Consultant

     47  

Compensation Committee Interlocks and Insider Participation

     48  

Peer Group Analysis

     48  
 

 

LOGO


TABLE OF CONTENTS

 

Other Arrangements, Policies, and Practices Related to Executive Compensation Programs

     48  

Compensation Committee Report

     51  

Summary Compensation Table

     52  

2022 Grants of Plan-Based Awards Table

     54  

Outstanding Equity Awards at 2022 Fiscal Year-End Table

     55  

Option Exercises and Stock Vested in 2022

     57  

Equity Compensation Plan Information

     58  

Nonqualified Deferred Compensation for Fiscal Year 2022

     59  

Deferred Compensation Plan for Key Employees

     59  

Supplemental 401(k) Savings Plan

     59  

Arrangements with Named Executive Officers

     60  

Executive Severance Plan

     60  

Change in Control Severance Plan

     61  

Release Agreement with Mr. Kennedy

     61  

Retention Agreement with Mr. McGarry

     61  

Offer Letter with Ms. Palmer

     62  

Offer Letter with Mr. Witter

     62  

Offer Letter with Ms. Vieira

     62  

Potential Payments Upon Termination or Change in Control

     63  

2022 Pay Ratio Disclosure

     66  

Pay Ratio

     66  

Methodology for Identifying our “Median Employee”

     66  

Determination of Annual Total Compensation of our “Median Employee” and our CEO

     67  

Pay Versus Performance

     68  

Director Compensation

     72  

2022 Director Compensation Table

     72  

Director Compensation Elements

     73  

Stock Ownership Guidelines

     74  

Other Compensation

     74  

Deferred Compensation Plan

     74  

Other Matters

     75  

Other Matters for the 2023 Annual Meeting

     75  

Stockholder Proposals for the 2024 Annual Meeting

     75  

Solicitation Costs

     75  

Householding

     75  

Questions and Answers About the Annual Meeting and Voting

     77  

Appendix A

Reconciliation of Non-GAAP Financial Measures

     A-1  
 

 

LOGO


LOGO

 

    

 

300 Continental Drive

Newark, Delaware 19713

 


The Board of Directors of SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” “our,” or “us”) is furnishing this proxy statement to solicit proxies for use at Sallie Mae’s 2023 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 4, 2023. We have determined that the Annual Meeting will be held in a virtual meeting format only (with no in-person meeting), via the Internet, at www.virtualshareholdermeeting.com/SLM2023. 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 Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”) are available at: https://www.salliemae.com/investors/shareholder-information and https://materials.proxyvote.com. You may also obtain these materials at the Securities and Exchange Commission (“SEC”) website at www.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 2022 Form 10-K without charge to any stockholder upon written request.

Proxy Statement Summary

This summary highlights certain information contained in the proxy statement. You should read the entire proxy statement and the 2022 Form 10-K carefully before you vote.

SLM’s Strategy

To further focus our business and increase shareholder value, we continue to advance our strategic imperatives. Our focus remains on maximizing the profitability and growth of our core private student loan business, while harnessing and optimizing the power of our brand and attractive client base. In addition, we continue to seek to better inform the external narrative about student lending and Sallie Mae. We also strive to maintain a rigorous and predictable capital allocation and return program to create shareholder value. We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work. We also continue to strengthen our risk and compliance function, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk.

We work to maximize the revenue of our core private student loan business by (i) driving penetration at all schools, (ii) increasing market share by fully meeting student funding needs, (iii) using enhanced risk-adjusted pricing and underwriting, and (iv) improving our marketing, digital, and data capabilities. In addition, we work to manage our unit costs by (a) employing a strong fixed cost discipline, (b) driving towards reducing both the unit costs of servicing and the unit cost of acquisitions, and (c) improving third-party vendor cost management.

On March 4, 2022, we completed the acquisition of the assets of Nitro College, which provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation. The addition of Nitro College brought innovative products, tools, and resources to help students and families confidently navigate their higher education journey.

The acquisition of Nitro College enhances future strategic growth opportunities for Sallie Mae and expands our digital marketing capabilities, reduces the cost to acquire customer accounts, and accelerates our progress to become a broader education solutions provider helping students to, through, and immediately after college.

 

2023 PROXY STATEMENT        1


PROXY STATEMENT SUMMARY

 

We strive to optimize the value of our brand and attractive client base by (i) building products and services that leverage our customer affiliation, (ii) ensuring products and services are consistent with our core mission and drive customer value, (iii) prioritizing partnerships and other capital efficient avenues of growth, and (iv) looking for opportunities to optimize the return on our investment.

In 2022, we worked to maintain a rigorous capital allocation and return program by (i) paying quarterly Common Stock dividends of $0.11 per share, (ii) selling approximately $3 billion of private education loans during the year, and (iii) repurchasing 40 million shares of our Common Stock under Rule 10b5-1 trading plans authorized under our share repurchase programs.

Corporate Governance Highlights

We believe that strong corporate governance is critical for our success. To this end, we have established robust governance structures including (i) separating the roles of Board Chair and CEO, (ii) focusing on director independence as our Board of Directors is comprised of 92% independent directors, and (iii) continuing our commitment to diversity among our Board of Directors, with 50% of our directors self-identifying as diverse, as disclosed further below in the NASDAQ Board Diversity Matrix. In addition, we are focused on Environmental, Social, and Governance practices, as disclosed further below in the “Environmental, Social, and Governance Practices” section in this proxy statement.

Executive Compensation

Our executive compensation philosophy has generally aligned the compensation received by our named executive officers with the Company’s performance. Our performance-based compensation programs focus our senior executives on goals that drive our financial performance while balancing risk and reward. Although the Company’s total shareholder return (as described below) has been positive over the last three years, payouts under our 2022 annual incentive plan were lower as compared to the prior year’s payouts because the Company’s performance in 2022 was not as strong as in 2021. While we achieved many significant Company successes in 2022, we did not deliver on certain key Company performance metrics during the year, such as charge-offs and earnings per share. For more information on our executive compensation including our practices and philosophy, please see our Compensation Discussion & Analysis on page 30.

2023 Annual Meeting of Stockholders

 

LOGO

 

2        SLM CORPORATION


Overview of Proposals

This proxy statement contains four 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 approval, on an advisory basis, of the frequency of future advisory votes on Sallie Mae’s executive compensation. Proposal 4 seeks ratification of the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2023. 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.

 

LOGO

 

    

                                          The Board of Directors recommends that you vote FOR each of Proposals 1, 2, and 4 and that you vote 1 YEAR for Proposal 3, as discussed in more detail below.

 

 

2023 PROXY STATEMENT        3


Proposal 1

Election of Directors

Our 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:

 

 

LOGO

 

Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under our By-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.

Our By-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 broker non-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 and Governance 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 Nominations and Governance 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.

 

 

4        SLM CORPORATION


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

Nominees for Election to the Board of Directors

 

LOGO

 

    

 

R. Scott Blackley    (Independent)

 

 

 

Chief Transformation Officer, Oscar Health, Inc.

 

Qualifications:

 

Mr. Blackley brings decades of experience in financial services, risk management, strategy, and operations to the Board of Directors.

 

 

Age: 54

 

Director Since:

November 2022

 

 

 

 

Professional Highlights:

 

•  Chief Transformation Officer, Oscar Health, Inc.—2022 to Present; Chief Financial Officer—2021 to 2022

•  Chief Financial Officer, Capital One Financial Corporation—2016 to 2021; Controller and Principal Accounting Officer—2011 to 2017

•  Senior Vice President and Chief Financial Officer, Capital Markets business, Federal National Mortgage Association (Fannie Mae)—2007 to 2011; Senior Vice President, Accounting Policy—2005 to 2007

•  Vice President, Assistant Controller, America Online, Inc.—2003 to 2005

•  Partner, KPMG, LLP—2002 to 2003

•  Professional Accounting Fellow, United States Securities and Exchange Commission— 2000 to 2002

 

Other Professional and Leadership Experience:

 

•  Director, Sallie Mae Bank—2022 to present

•  Director and Budget Chair, Trout Unlimited—2019 to present

•  Director, Hexamer Therapeutics—2019 to present

 

LOGO

 

    

 

 

Paul G. Child    (Independent/Audit Committee Chair)

 

 

 

Former Office Managing Partner, Salt Lake City, Deloitte LLP

 

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: 74

 

Director Since:

April 2014

 

 

 

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

•  Director, Ballet West—2000 to 2008

•  Director, Pioneer Theater—2000 to 2006

 

2023 PROXY STATEMENT        5


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

 

LOGO

    

 

 

Mary Carter Warren Franke    (Independent/Board Chair)

 

 

 

Former Managing

Director, Head of

Corporate Marketing,

JPMorgan Chase & Co.

 

Age: 66

 

Director Since:

April 2014

 

 

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.

 

 

 

 

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, Investors Management Corporation—2021 to present

•  Director, The Warfield Fund—2007 to present

•  Director, Saint Mary’s School—2014 to 2020

•  Director, Hobe Sound Community Chest—2017 to present

•  Director, Paul’s Place—2014 to 2017

 

LOGO

 

    

 

 

Marianne M. Keler    (Independent/Nominations and Governance                                         Committee Chair)

 

 

 

Attorney, Keler & Kershow PLLC

 

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: 68

 

Director Since:

April 2014

 

 

 

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 2020

•  Board Chair, American College of the Mediterranean—2018 to present; trustee since 2007

•  Board Chair, American University in Bulgaria—2008 to 2014; trustee since 2001

•  Finance Committee Chair, EL Haynes Charter School Board of Directors—2006 to 2012

•  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 2022; Board Chair—2018 to 2022

 

 

6        SLM CORPORATION


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

 

LOGO

    

 

 

Mark L. Lavelle    (Independent/Compensation Committee Chair)

 

 

 

Chief Executive Officer, Maergo

 

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: 57

 

Director Since:

April 2019

 

 

 

Professional Highlights:

 

•  Chief Executive Officer, Maergo (formerly known as X Delivery)—2021 to present

•  Chairman and Chief Executive Officer, Deep Lake Capital—2021 to present

•  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

LOGO

 

    

 

 

 

Ted Manvitz    (Independent)

 

 

 

Managing Director, Grain Management

 

Qualifications:

 

Mr. Manvitz’s extensive experience in the areas of strategic planning and investments, capital allocation, senior executive management, operations, finance, mergers and acquisitions, and capital markets allows him to provide valuable insight to the Board of Directors in driving growth, building partnerships, and creating value.

 

Age: 51

 

Director Since:

March 2021

 

 

 

Professional Highlights:

 

•  Managing Director, Grain Management—2022 to present

•  Interim Chief Financial Officer, Optimus Ride—2021

•  Senior Advisor IHS Holding Limited—2019 to 2021; Executive Vice President and Chief Strategy Officer—2018 to 2019; Chief Financial Officer—2016 to 2018; Chief Investment Officer—2013 to 2016; Chief Operating Officer—2011 to 2013; Executive Director, Corporate Finance and M&A—2010 to 2011

•  Managing Director, Arm Capital Partners—2009 to 2010

•  Executive Director, J.P. Morgan Securities, Inc.—2006 to 2009; Vice President—2004 to 2006; Associate Vice President—2002 to 2004

 

Other Professional and Leadership Experience:

 

•  Director, Sallie Mae Bank—2021 to present

•  Director, Alares—2022 to present

•  Senior Advisor, Africell—2021 to present

•  Adjunct Faculty, American University—2020 to present

 

2023 PROXY STATEMENT        7


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

 

LOGO

    

 

 

Jim Matheson    (Independent)

 

 

 

Chief Executive Officer, NRECA

 

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: 63

 

Director Since:

March 2015

 

 

 

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 2022

 

LOGO

 

    

 

 

 

Samuel T. Ramsey    (Independent)

 

 

 

Former Chief Risk Officer, Chase, the consumer and small business organization within JP Morgan Chase & Co.

 

Qualifications:

 

Mr. Ramsey brings more than 30 years of experience in consumer and commercial banking, with expertise in risk management, finance, treasury, and the capital markets, to the Board of Directors.

 

 

Age: 63

 

Director Since:

November 2021

 

 

 

Professional Highlights:

 

•  Chief Risk Officer, Chase, the consumer and small business organization within JP Morgan Chase & Co.—2011 to 2014

•  Chief Risk Officer, Ally Financial Inc.—2007 to 2010

•  Chief Financial Officer, Global Corporate and Investment Banking, Bank of America—2006 to 2007

•  Enterprise Credit and Market Risk Executive, Chief Risk Executive for Global Consumer and Small Business Banking, Enterprise Operational and Market Risk Executive, Bank of America—2004 to 2006

 

Other Professional and Leadership Experience:

 

•  Director, Sallie Mae Bank—2021 to present

•  Director, Chair of Audit Committee, member of the Compliance and Finance Committees, Ditech Holding Corporation—2018 to 2019

 

 

8        SLM CORPORATION


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

 

LOGO

    

 

Vivian C. Schneck-Last    (Independent/Operational and Compliance Risk Committee Chair)

 

 

 

 

Former Managing Director, Global Head of Technology Governance, Goldman Sachs & Company

 

Age: 62

 

Director Since:

March 2015

 

 

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.

 

 

Professional Highlights:

 

•  Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to 2014; Managing Director, Global Head of Technology Business Development—2000 to 2014; Managing Director, Global Head of Technology Vendor Management—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 Corp.—2020 to 2022

 

LOGO

 

    

 

 

 

Robert S. Strong    (Independent/Financial Risk Committee Chair)

 

 

 

Former Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities

 

Age: 74

 

Director Since:

April 2014

 

 

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.

 

 

 

 

Professional Highlights:

 

•  Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to 2007; Managing Director, Portfolio Management—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 2020

•  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

 

 

2023 PROXY STATEMENT        9


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

 

LOGO

    

 

 

Jonathan W. Witter    (Executive; Not Independent)

 

 

 

Chief Executive Officer, Sallie Mae

 

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: 54

 

Director Since:

April 2020

 

 

 

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—September 2011 to February 2012; Executive Vice President—Retail Banking—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

 

LOGO

 

    

 

 

Kirsten O. Wolberg    (Independent/Preferred Stock Committee Chair)

 

 

 

Former Chief Technology and Operations Officer, DocuSign

 

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, cyber security, and business operations.

 

 

Age: 55

 

Director Since:

November 2016

 

 

 

Professional Highlights:

 

•  Chief Technology and Operations Officer, DocuSign—2017 to 2021

•  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

•  Vice President, Corporate Technology, Charles Schwab & Co.—2001 to 2008

 

Other Professional and Leadership Experience:

 

•  Director, Sallie Mae Bank—2016 to present

•  Director, Atlas —2023 to present

•  Director, Epidemic Sound-2021 to present

•  Director, Pryon-2021 to present

•  Director, Pie Insurance-2021 to present

•  Director, Duco Technology Limited—2020 to 2021

•  Director, Year Up—2008 to 2021

•  Director, Jewish Vocational Services—2014 to present

 

Directorships of other public companies:

 

•  Silicon Graphics International Corp.—2016

•  CalAmp Corp—2020 to present

•  Dynatrace, Inc.—2021 to present

 

10        SLM CORPORATION


PROPOSAL 1  |  ELECTION OF DIRECTORS

 

Board of Directors Recommendation

 

LOGO

 

    

                                          The Board of Directors Recommends a Vote “FOR”
the Election of the Twelve Nominees Named Above.

 

 

 

 

 

2023 PROXY STATEMENT        11


Proposal 2—

Advisory Vote on

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 2022, we submitted a non-binding vote to our stockholders to approve our executive compensation. Approximately 98.6 percent of the stockholders voted in favor of the say-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, in 2022 we continued to focus on performance-based compensation for our NEOs as we (i) tied a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business and (ii) awarded a significant percentage, 50 percent, of the NEO’s long-term incentive plan (“LTIP”) equity awards in the form of performance-based awards consisting of performance stock units (“PSUs”).

The compensation awarded to our Chief Executive Officer (“CEO”), Jonathan W. Witter, and other NEOs for 2022 reflects the execution on our strategic priorities and core business in 2022, i.e., growing loan originations, expanding net interest margin, returning a significant amount of capital to stockholders, and rigorously managing expenses in an uncertain macroeconomic environment. The Compensation 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 2022 pay decisions made by the Compensation 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 our pay-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 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 in voting power of the Common Stock present or represented, and entitled to vote thereon. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including broker non-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the Compensation Committee or the Board of Directors. However, the Compensation Committee will carefully evaluate the outcome of the vote when considering future executive compensation decisions. Following our Annual Meeting, we expect to hold the next advisory say-on-pay vote at our 2024 annual meeting of our stockholders.

Board of Directors Recommendation

 

LOGO

 

    

                                      

   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.

 

 

12        SLM CORPORATION


Proposal 3—

Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation

Section 14A of the Exchange Act also requires the Company to hold, at least once every six years, shareholder advisory votes on the frequency of future advisory votes on executive compensation. This proposal allows the Company’s stockholders to express their views on whether future advisory votes on executive compensation of the nature reflected in Proposal 2 should occur every one, two, or three years. Stockholders may specify “1 year”, as recommended by the Board of Directors, or “2 years” or “3 years” on the proxy card or voting instruction form or may abstain from voting on this proposal.

Historically, the Board of Directors has recommended stockholders hold an advisory vote on executive compensation each year. An annual vote provides stockholders with an opportunity to provide input on compensation decisions and allows the Board of Directors to promptly reevaluate compensation policies and practices and reflect on stockholder feedback. This is also the preferred approach by many investors and institutional shareholder advisory service firms. For these reasons, the Board of Directors recommends that stockholders vote to hold an advisory vote on executive compensation every year.

The vote is advisory and not binding upon the Company and its Board of Directors. However, the Board of Directors values your opinion and will consider your vote when making future decisions on the frequency of the advisory vote. Notwithstanding the Board of Directors’ recommendation and the outcome of the stockholder vote, the Board of Directors may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs. Following our Annual Meeting, we expect to hold the next advisory vote on the frequency of future advisory votes on executive compensation at our 2029 annual meeting of our stockholders.

This proposal requires the affirmative vote of the holders of a majority in voting power of the Common Stock present or represented, and entitled to vote thereon. Abstentions will not be counted as votes cast “FOR” any of the frequency choices but will be counted as present or represented for determining whether any option receives a majority vote. If none of the options receive a majority vote, the option that receives the highest number of votes cast will be considered to be the frequency selected by stockholders. However, because this is only an advisory vote, the Board of Directors may decide that it is in the best interests of the stockholders and the Company to hold the say-on-pay vote more or less frequently than the option selected by the stockholders.

Board of Directors Recommendation

 

LOGO

 

    

                                          The Board of Directors recommends a vote For the
Option of “1 YEAR” as the Preferred Frequency for
Advisory votes on Executive Compensation.

 

 

 

2023 PROXY STATEMENT        13


Proposal 4—

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, 2023. 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 in voting power of the Common Stock present or represented, and entitled to vote thereon. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter 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 2023 if, in its discretion, it determines such a change would be in the Company’s best interests.

Board of Directors Recommendation

 

LOGO

 

    

                                          The Board of Directors recommends a vote “FOR”
Ratification of the Appointment of KPMG as Sallie
Mae’s Independent registered public accounting Firm for 2023.

 

 

 

14        SLM CORPORATION


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.

Board Governance Guidelines

The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the Nominations and Governance Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published at www.salliemae.com/investors/corporate-governance/ and a written copy may be obtained by contacting the Corporate Secretary at corporatesecretary@salliemae.com or SLM Corporation, 300 Continental Drive, Newark, DE 19713. The Guidelines, along with Sallie Mae’s By-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 (i) Audit, (ii) Nominations and Governance, and (iii) Compensation Committees must be independent.

 

 

All directors stand for re-election each year. Directors are elected under a majority vote standard in uncontested elections.

 

 

We have separated the role of Board Chair from CEO. We do not have a Lead Independent Director given the independence of our Board Chair.

 

 

Each regularly scheduled Board of Directors meeting may conclude 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 seek representation on the Board of Directors that reflects a diversity of geography, gender, race, ethnicity, nationality, age, sexual orientation, and gender identity.

 

 

We maintain stock ownership and retention guidelines for directors and executive officers.

 

 

The Board of Directors and its committees undertake an annual review to evaluate their effectiveness.

 

 

Directors should not serve on more than three other public company boards in addition to the Company’s Board of Directors.

 

 

Non-employee directors are to retire no later than at the annual meeting of stockholders following such director’s 75th birthday.

 

2023 PROXY STATEMENT        15


CORPORATE GOVERNANCE

 

Board Leadership Structure

Ms. Franke, an independent director of the Company and Sallie Mae Bank, our wholly-owned subsidiary (the “Bank”), serves as the first woman to chair the Board of Directors of the Company as well as the Board of Directors of the Bank. Our independent Board Chair serves as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and stockholders. Mr. Witter, our CEO, serves as a member of the Board of Directors. The Board of Directors believes an independent director is best situated to serve as Board Chair as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. By separating the CEO role from the Board Chair role, the Company is currently put in the best position to oversee all executives of the Company, monitor and respond to key risks and strategic initiatives at the Company, and act in the best interest of stockholders. The Board of Directors believes the Company is currently best served by separating the roles of Board Chair and CEO, while, subject to Sallie Mae’s By-Laws, the Board of Directors reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at any given point in time.

Director Independence

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 each of the individuals who served as a director during 2022 and all nominees standing for election at the Annual Meeting, other than Mr. Witter, our CEO, are independent of Sallie Mae.

Each member of the Board of Directors’ Audit, Nominations and Governance, and Compensation Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule 10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines. The Guidelines are published at www.salliemae.com/investors/corporate-governance/.

Board Diversity

Our Board of Directors believes diversity is important and seeks representation across a range of attributes, including gender, race, ethnicity, and professional experience, and regularly assesses diversity when identifying and evaluating director candidates. As of December 31, 2022, our Board of Directors consisted of the following:

 

 

LOGO

 

*

Including our Board Chair

 

16        SLM CORPORATION


CORPORATE GOVERNANCE

 

Pursuant to NASDAQ’s Board Diversity Rule, which was approved by the SEC on August 6, 2021, Board diversity disclosure is provided in the two tables below as of December 31, 2021 and December 31, 2022, respectively. The Company is in compliance with the NASDAQ Board Diversity Rule as at least one director self-identifies as female and at least one additional director self-identifies as an underrepresented minority or LGBTQ+.

Board Diversity Matrix (As of December 31, 2022)

 

LOGO

 

    

Total Number of Directors    12

              Female                           Male                       Non-Binary          

Did Not

   Disclose Gender   

Part I: Gender Identity

 

 

 

 

 

 

 

 

       

Directors

  4   8  

 

 

 

Part II: Demographic Background

 

 

 

 

 

 

 

 

       

African American or Black

 

 

  1  

 

 

 

       

Alaskan Native or Native American

 

 

 

 

 

 

 

 

       

Asian

 

 

 

 

 

 

 

 

       

Hispanic or Latinx

 

 

 

 

 

 

 

 

       

Native Hawaiian or Pacific Islander

 

 

 

 

 

 

 

 

       

White

  3   7  

 

 

 

       

Two or More Races or Ethnicities

 

 

 

 

 

 

 

 

 

LGBTQ+

  1  
 

Did Not Disclose Demographic Background

  1  

Board Diversity Matrix (As of December 31, 2021)

 

LOGO

 

    

Total Number of Directors    12

              Female                           Male                       Non-Binary           Did Not
   Disclose Gender   

Part I: Gender Identity

 

 

 

 

 

 

 

 

       

Directors

  4   8  

 

 

 

Part II: Demographic Background

 

 

 

 

 

 

 

 

       

African American or Black

 

 

  1  

 

 

 

       

Alaskan Native or Native American

 

 

 

 

 

 

 

 

       

Asian

 

 

 

 

 

 

 

 

       

Hispanic or Latinx

 

 

 

 

 

 

 

 

       

Native Hawaiian or Pacific Islander

 

 

 

 

 

 

 

 

       

White

  3   7  

 

 

 

       

Two or More Races or Ethnicities

 

 

 

 

 

 

 

 

 

LGBTQ+

  1  
 

Did Not Disclose Demographic Background

  1  

 

2023 PROXY STATEMENT        17


CORPORATE GOVERNANCE

 

Board Skills and Experience

 

LOGO

Board, Committee, and Annual Meeting Attendance

Our Board of Directors met 15 times in 2022. Each of the incumbent 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 11 out of 12 of the then-serving members of the Board of Directors attended the Annual Meeting in June 2022. Mr. Frank C. Puleo retired on June 21, 2022, the date of the 2022 Annual Meeting. Accordingly, he did not stand for re-election and did not attend the 2022 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; Compensation; Nominations and Governance; Financial Risk; Operational and Compliance Risk; and Preferred Stock. Each committee is governed by a Board-approved written charter, which is evaluated annually and sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.

Committee charters are available at www.salliemae.com/investors/corporate-governance/. Stockholders may obtain a written copy of any and all committee charters by contacting the Corporate Secretary at corporatesecretary@salliemae.com or SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.

 

18        SLM CORPORATION


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, 2022.

 

LOGO

    

    Audit(1)  

Nominations

and

Governance

  Compensation  

Operational

and Compliance
Risk(2)

 

Financial

Risk(2)

  Preferred Stock

R. Scott Blackley(1) (2)(+)

  *  

 

 

 

  *  

 

 

 

Paul G. Child(1) (2) (+)

  Chair  

 

 

 

 

 

  *  

 

Mary Carter Warren Franke(2) (+) (C)

 

 

  *   *  

 

 

 

 

 

Marianne M. Keler(1) (+)

  *   Chair  

 

 

 

 

 

  *

Mark L. Lavelle(2) (+)

 

 

 

 

  Chair  

 

  *  

 

Ted Manvitz(1) (+)

  *  

 

  *  

 

 

 

  *

Jim Matheson(+)

  *   *  

 

 

 

 

 

 

 

Frank C. Puleo(3) (+)

 

 

  *(3)  

 

 

 

  *(3)  

 

Samuel T. Ramsey(1) (2) (+)

 

 

 

 

 

 

  *   *  

 

Vivian Schneck-Last (2) (+)

 

 

  *  

 

  Chair  

 

 

 

Robert S. Strong(1) (2) (+)

 

 

 

 

 

 

  *   Chair  

 

Jonathan W. Witter

 

 

 

 

 

 

 

 

 

 

 

 

Kirsten O. Wolberg(2) (+)

 

 

 

 

  *   *  

 

  Chair

Number of Meetings in 2022

  9   6   8   6   11   1

 

*

Committee Member

 

(C)

Board Chair

 

(+)

Independent Board Member

 

(1)

The Board of Directors determined Mr. Blackley, Mr. Child, Ms. Keler, Mr. Manvitz, Mr. Ramsey, and Mr. Strong each qualified as an “Audit Committee Financial Expert” as set forth in Item 407(d)(5) of Regulation S-K. During 2022, none of the Audit Committee members served on the Audit Committee of more than three public companies.

 

(2)

The Board of Directors determined Mr. Blackely, Mr. Child, Ms. Franke, Mr. Lavelle, Mr. Ramsey, Ms. Schneck-Last, Mr. Strong, and Ms. Wolberg 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.

 

(3)

Mr. Puleo served on the Nominations and Governance Committee and the Financial Risk Committee through his date of retirement from the Board of Directors on June 21, 2022.

 

2023 PROXY STATEMENT        19


CORPORATE GOVERNANCE

 

Risk Oversight

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. We believe this risk oversight structure complements our current Board leadership structure of separate Chair and CEO roles and each of the committees of the Board of Directors being comprised solely of independent directors. 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;

 

•  review reports prepared by management and/or external auditor setting forth significant financial reporting issues;

 

•  review sufficiency of internal controls over financial reporting and disclosure controls;

 

•  engage and communicate with our independent registered public accounting firm; and

 

•  oversee operation of internal audit function, staffing, and work plan.

    

Nominations and Governance

 

•  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;

 

•  review related party transactions; and

 

•  oversee the environmental, social, and governance (“ESG”) function of the Company.

    

Compensation Committee

 

•  oversee all compensation and benefits for our CEO, executive officers, and independent directors;

 

•  oversee equity-based compensation plans;

 

•  review management’s administration of employee benefit plans;

 

•  review management succession planning;

 

•  oversee human capital management, including in the areas of diversity, equity, and inclusion; and

 

•  review and confirm our incentive compensation practices properly balance risk and reward and do not encourage excessive risk-taking.

    

Financial Risk Committee

 

•  monitor our major financial risks, including credit, market, and liquidity risks;

 

•  review our risk management framework as it pertains to financial risks and supporting governance structure, roles, and responsibilities established by management;

 

•  review our risk appetite framework and conduct regular reviews of key risk measures with respect to financial risks;

 

•  review and approve loan securitization transactions, loan sales, or debt transactions of our Company or our affiliates; and

 

•  oversee framework and strategies pertaining to liquidity and capital management and review capital and liquidity stress testing scenarios and key assumptions.

    

Operational and Compliance Risk Committee

 

•  monitor our major non-financial risks, including operational and compliance risks;

 

•  review our risk management framework as it pertains to non-financial risks and supporting governance structure, roles, and responsibilities established by management;

 

•  review our risk appetite framework and conduct regular reviews of key risk measures with respect to non-financial risks;

 

•  oversee and monitor information security and cyber-related risks;

 

•  monitor risk management capabilities related to third-party service providers, information and data security, privacy, crisis preparedness, business continuity and disaster recovery plans;

 

•  oversee the Bank’s Community Reinvestment Act (“CRA”) program and monitor its progress towards 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 to low- and moderate-income persons, and community development service activity, focusing on underserved communities in the Bank’s assessment area; and

 

•  oversee model risk management framework.

    

Preferred Stock Committee

 

•  monitor and evaluate our business activities in light of the rights of holders of the Company’s preferred stock.

 

LOGO

 

    

 

All members of the Board of Directors also serve as members of the board of directors of the Bank and its committees. Our Audit, Compensation, Nominations and Governance, Financial Risk, and Operational and Compliance Risk committees perform similar oversight roles for the Bank.

 

 

20        SLM CORPORATION


CORPORATE GOVERNANCE

 

Nominations Process

The Nominations and Governance 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 across a range of professional experiences, and that reflects gender, race, ethnic, and geographic diversity. The minimum qualifications and attributes the Nominations and Governance 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 Nominations and Governance Committee at corporatesecretary@salliemae.com or c/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 2023 Annual Meeting has now closed. A stockholder wishing to nominate a candidate for the 2024 Annual Meeting must comply with the notice and other requirements in the By-Laws as described under “Stockholder Proposals for the 2024 Annual Meeting” in this proxy statement.

Related Party Transactions

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/or less-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 are pre-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.

Under the Related Party Transactions policy, the Chief Legal, Government Affairs and Communications Officer will notify the Chair of the Nominations and Governance Committee of any proposed Related Party Transaction, and the Chair of the Nominations and Governance Committee will determine if approval under the policy is required. If required, the Nominations and Governance 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 Nominations and Governance Committee and the Board of Directors take 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 we believe will drive sustainable, long-term growth and profitability. Such “environmental, social, and governance” or “ESG” practices may mean different things to different investors and stakeholders and to the organizations that evaluate and rate ESG practices. Our ESG practices are shaped by our mission—to power confidence as students begin their unique journeys. In April 2023, we released our annual ESG report, discussing our commitment to ESG practices. For a full discussion, please read our ESG report at www.salliemae.com/esg. Neither the report nor our website is incorporated by reference in this proxy statement.

 

2023 PROXY STATEMENT        21


CORPORATE GOVERNANCE

 

Human Capital Empowerment and Talent Development

We believe in a just and inclusive, values-based, mission-led culture that inspires commitment and drives performance. Our human capital strategy is focused on the attraction, development, empowerment, recognition, and rewarding of team members as they bring our mission to life.

We strive to create a diverse culture of inclusion and an environment that encourages and reinforces mutual trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces diverse backgrounds and perspectives to power and fuel our mission. We believe such a diverse and inclusive workforce can lead to a more effective company.

We are focused on providing a total compensation package that enables us to attract, motivate, and retain our employees to help drive our business forward. Our benefits package includes company contributions to the 401(k) plan, educational assistance to our team members and their dependents, flexible work arrangements, and other comprehensive health and welfare programs. We also believe in paying competitive market wages, which is why we established $20/hour as our minimum starting rate for all positions in 2021.

As of December 31, 2022, we had approximately 1,700 team members, all located in the United States. We believe an engaged workforce leads to a more innovative, productive, and profitable company. For this reason, we measure employee engagement through culture surveys. These culture surveys provide insights we use to create an environment in which team members thrive and bring their full selves to work.

Ensuring the safety and well-being of our team members continued to be a priority during the COVID-19 pandemic. In March 2020, we enacted a robust business continuity plan, including remote working capabilities for all team members. We further adapted to the changing environment in 2021, and now offer remote, in-office, and hybrid options so our team may work in a manner best suited for them and their positions. We continue to provide team members with the tools and resources necessary to support their success and drive performance of the Company.

Our team members are involved in the communities in which they live and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program. In 2022, our team members volunteered 1,928 hours of their time through our community engagement programs. We also provide matching gifts for team members to support the interests and needs of them and their communities.

Corporate Governance

Sallie Mae’s Board of Directors, executive leaders, team members, and business partners are committed to operating under sound principles of corporate governance. We believe maintaining high standards of accountability and transparency are fundamental for the long-term success of our business. Our corporate governance structure ensures robust Board and management responsibility, responsiveness to our stockholders, and responsible decision-making. Our overarching code of conduct, corporate governance policies, Board committee charters, certificate of incorporation, and By-Laws form the framework of governance at Sallie Mae. Since the formation of the Company, we have attracted and built a strong, qualified, and diverse Board of Directors whose members have expertise relevant to our business and are deeply committed to operating ethically and with integrity. Eleven members of the Board are independent directors, including Ms. Franke, the first woman to serve as Board Chair in the Company’s history.

Political Expenditures

Our current policy on political activities is publicly available on our website at www.salliemae.com/investors/corporate-governance/ and sets forth the principles regarding our stance on political activities. We comply with federal, state, and local lobbying registration and disclosure requirements. We work closely with the Nominations and Governance Committee to review and assess 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 (as hereinafter defined) 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 external, bipartisan lobbying/consulting firms that assist with the same objectives, and we report the lobbying-related expenditures made to external firms in our lobbying disclosures. Our involvement with industry associations is limited to those associations comprised of financial institutions with similar interests.

 

22        SLM CORPORATION


CORPORATE GOVERNANCE

 

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.

The Sallie Mae Political Action Committee (“PAC”)

In June 2015, we formed the Sallie Mae PAC. 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 contributions. The PAC’s Advisory Board evaluates candidates, of any party, on factors that include their views on policy matters that impact Sallie Mae and our employees, their committee or leadership role, and representation of Sallie Mae facilities and employees.

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, the non-management directors as a group, the Board Chair, or any other individual member of the Board of Directors by contacting the Corporate Secretary in writing at corporatesecretary@salliemae.com or c/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.

Code of Business Conduct

We have a Code of Business Conduct that applies to the Board of Directors and all employees. The Code of Business Conduct is available on our website (www.salliemae.com/investors/corporate-governance/) 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.

 

2023 PROXY STATEMENT        23


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 internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with the Company’s management.

 

2.

The Audit Committee has discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission (the “Commission”).

 

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 at www.salliemae.com under “For Investors.”

 

5.

The Audit Committee’s charter requires the pre-approval by the Audit Committee of all fees paid to, and all services performed by, the Company’s independent registered public accounting firm. At the beginning of each year, the Audit Committee approves the proposed services, including the nature, type and scope of service contemplated and the related fees, to be rendered by the firm during the year. In addition, engagements may arise during the course of the year that are outside the scope of the initial services and fees approved by the Audit Committee. Any such additional engagements are approved by the Audit Committee or by the Audit Committee Chair pursuant to authority delegated by the Audit Committee. For each category of proposed service, the independent registered public accounting firm is required to confirm that the provision of such services does not impair its independence. Pursuant to the Sarbanes-Oxley Act of 2002, the fees and services provided as noted in the table on the following page were authorized and approved by the Audit Committee in compliance with the pre-approval requirements described herein.

 

6.

Based on the review and discussions referred to in paragraphs (1) through (5) above, the Audit Committee recommended to the Board of Directors of the Company, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the Commission.

 

     

Audit Committee

 

Paul G. Child, Chair

R. Scott Blackley

Marianne M. Keler

Ted Manvitz

Jim Matheson

 

24        SLM CORPORATION


Independent Registered Public Accounting Firm

Independent Registered Public Accounting Firm Fees for 2022 and 2021

Aggregate fees billed for services performed for Sallie Mae by its independent accountant, KPMG, for fiscal years ended December 31, 2022 and 2021, are set forth below.

 

LOGO

 

    

 

     2022      2021  

Audit Fees

     $2,149,441        $1,877,570  

Audit Related Fees

     $945,000        $1,110,000  

Tax Fees

            $3,679  

All other fees

             

Total

     $3,094,441        $2,991,249  

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, and for assistance with review of documents filed with the SEC.

Audit-Related Fees. Audit-related fees include fees for assurance services related to servicing compliance reports, trust servicing and administration compliance reports, attest services that are not required by statute or regulation, and services related to the issuance of consents and comfort letters.

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, 2022 were $0. All other fees for the fiscal year ended December 31, 2021 were $0.

Pre-Approval Requirements

The Audit Committee’s charter addresses the approval of audit and non-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 be pre-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 and non-audit services provided by KPMG during 2022. Reporting is provided to the Audit Committee regarding services the Chair of the Audit Committee pre-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 the pre-approval requirement set forth in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

2023 PROXY STATEMENT        25


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 2023 for the year ended December 31, 2022 on Schedule 13G, 13G/A, or 13F-HR, as applicable, under the Exchange Act.

 

LOGO

 

    

 

Name and Address of Beneficial Owner

   Shares(1)      Percent(1)  

The Vanguard Group, Inc.(2)

100 Vanguard Blvd.

Malvern, PA 19355

     31,617,580        12.64

Impactive Capital LP(3)

152 West 57th Street, 17th Floor

New York, New York 10019

     23,544,180        9.78

BlackRock, Inc.(4)

55 East 52nd Street

New York, NY 10055

     22,052,246        8.8

Massachusetts Financial Services Company(5)

111 Huntington Avenue

Boston, MA 02199

     17,456,866        7.0

UBS Group AG(6)

Bahnhofstrasse 45

PO Box CH-8021

Zurich, Switzerland

     16,562,446        6.62

 

(1)

Based on information in the most recent Schedule 13G, 13G/A, or 13F-HR, as the case may be, filed with the SEC pursuant to the Exchange Act with respect to holdings of the Company’s Common Stock as of December 31, 2022. Percentages are based on computations contained in the Schedule 13G or 13G/A of the reporting entity and other information we reasonably believe to be accurate.

 

(2)

Information is as of December 31, 2022 and is based upon a Schedule 13G/A, filed with the SEC on February 9, 2023, by The Vanguard Group, Inc., a Pennsylvania corporation. The reporting entity reported the sole power to vote or direct the voting for 0 shares of Common Stock, the shared power to vote or direct the voting for 121,322 shares of Common Stock, the sole power to dispose of or direct the disposition of 31,252,070 shares of Common Stock, and shared power to dispose of or direct the disposition of 365,510 shares of Common Stock.

 

(3)

Information is as of December 31, 2022 and is based upon a Schedule 13F-HR, filed with the SEC on February 14, 2023, by Impactive Capital LP, a Delaware limited partnership. The reporting entity reported the sole power to vote or direct the vote for 23,544,180 shares of Common Stock.

 

(4)

Information is as of December 31, 2022 and is based upon a Schedule 13G, filed with the SEC on January 25, 2023, by BlackRock, Inc., a Delaware corporation. The reporting entity reported the sole power to vote or direct the voting for 21,362,029 shares of Common Stock and the sole power to dispose of or direct the disposition of 22,052,246 shares of Common Stock.

 

(5)

Information is as of December 31, 2022 and is based upon a Schedule 13G/A, filed with the SEC on February 8, 2023, by Massachusetts Financial Services Company, a Delaware corporation. The reporting entity reported the sole power to vote or direct the voting for 17,146,433 shares of Common Stock and the sole power to dispose of or direct the disposition of 17,456,866 shares of Common Stock.

 

(6)

Information is as of December 30, 2022 and is based upon a Schedule 13G, filed with the SEC on February 13, 2023, by UBS Group AG for the benefit and on behalf of the UBS Asset Management (Americas) Inc. The reporting entity reported the sole power to vote or direct the voting for 12,838,414 shares of Common Stock, the shared power to vote or direct the voting for 0 shares of Common Stock, the sole power to dispose of or direct the disposition of 0 shares of Common Stock, and shared power to dispose of or direct the disposition of 16,562,446 shares of Common Stock.

 

26        SLM CORPORATION


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, 2023, unless noted otherwise. As of February 28, 2023, the Company had 242,216,315 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.

 

LOGO

 

    

 

     Shares      Vested
Options(1)
     Total
Beneficial
Ownership
     Percent
of
Class
 

Directors and Director Nominees

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

R. Scott Blackley

                          *  

Paul G. Child

     79,008               79,008        *  

Mary Carter Warren Franke(2)

     84,151               84,151        *  

Marianne M. Keler(3)

     113,758               113,758        *  

Mark L. Lavelle

     44,414               44,414        *  

Ted Manvitz

     20,121               20,121        *  

Jim Matheson

     78,318               78,318        *  

Samuel T. Ramsey

     8,081               8,081        *  

Vivian C. Schneck-Last

     71,098               71,098        *  

Robert S. Strong

     99,623               99,623        *  

Jonathan W. Witter(4)

     909,332               909,332        *  

Kirsten O. Wolberg

     54,200               54,200        *  

Named Executive Officers

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Steven J. McGarry(5)

     316,956               316,956        *  

Kerri A. Palmer

     9,096               9,096        *  

Daniel P. Kennedy

     205,322               205,322        *  

Donna F. Vieira

     84,490               84,490        *  

Current Directors and Executive Officers as a Group (17 Persons)

     2,202,433               2,202,433        *  

 

*

Represents beneficial ownership of less than 1 percent.

 

(1)

Shares that may be acquired within 60 days of February 28, 2023, through exercise of vested net settled options. Net settled options are shown on a “spread basis” and if not in-the-money shown as 0.

 

(2)

Includes 7,000 shares held by Ms. Franke’s spouse in his IRA.

 

(3)

Includes 76,574 shares held in trust.

 

(4)

Includes 249,015 shares that vested on April 20, 2023.

 

(5)

Includes 117 shares credited as phantom stock units due to a deferred compensation plan account.

 

2023 PROXY STATEMENT        27


Executive Officers

Our executive officers are appointed annually by the Board of Directors. The following sets forth biographical information concerning Sallie Mae’s executive officers who are not directors. Biographical information for Mr. Witter is included in Proposal 1—Election of Directors.

 

LOGO   

Steven J. McGarry

 

Age 65

Position and Business Experience

 

 

Executive Vice President and Chief Financial Officer, SLM Corporation—May 2014 to present; Senior Vice President—Corporate Finance and Investor Relations, SLM Corporation—June 2013 to April 2014; Senior Vice President—Investor Relations, SLM Corporation—June 2008 to June 2013

 

 

 

LOGO   

Kerri A. Palmer

 

Age 52

Position and Business Experience

 

 

Executive Vice President and Chief Operational Officer, SLM Corporation and President, Sallie Mae Bank—January 2023-Present; Executive Vice President and Chief Risk Officer, SLM Corporation—April 2022 to January 2023; Executive Vice President and Chief Risk and Compliance Officer, SLM Corporation—January 2021 to April 2022

 

 

Senior Vice President, Risk Management, Capital One Financial Corporation—2013 to January 2021; Managing Vice President and Business Chief Risk Officer, Auto Finance and Mortgage, Capital One Financial Corporation—2008 to 2013

 

 

 

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Donna F. Vieira

 

Age 58

Position and Business Experience

 

 

Executive Vice President and Chief Commercial Officer, SLM Corporation—August 2020 to present; Executive Vice President and Chief Marketing Officer, SLM Corporation—January 2019 to August 2020

 

 

Director, Choice Hotels International, Inc. —July 2021-Present

 

 

Chief Marketing Officer, Consumer Banking and Wealth Management, JPMorgan Chase—May 2014 to October 2018; Chief Marketing Officer, Chase Business Banking, JPMorgan Chase—April 2011 to May 2014

 

 

Senior Vice President, Relationship Manager, Dun & Bradstreet—March 2010 to April 2011

 

 

Senior Vice President, General Manager Small Business Products, Dun & Bradstreet—July 2008 to March 2010

 

28        SLM CORPORATION


EXECUTIVE OFFICERS

 

LOGO   

Jonathan R. Boyles

 

Age 56

Position and Business Experience

 

 

Senior Vice President, Controller, SLM Corporation—May 2014 to present; Vice President, Corporate Financial Reporting and Accounting Policy, SLM Corporation—May 2010 to April 2014

 

 

 

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Nicolas Jafarieh

 

Age 48

Position and Business Experience

 

 

Executive Vice President and Chief Legal, Government Affairs & Communications Officer, SLM Corporation—April 2022 to present; Senior Vice President and Chief Legal, Government Affairs & Communications Officer, SLM Corporation-August 2020 to April 2022; Senior Vice President and General Counsel, SLM Corporation—March 2018 to August 2020; Senior Vice President, Deputy General Counsel, and Assistant Corporate Secretary, SLM Corporation—February 2017 to March 2018; Vice President, Associate General Counsel, and Assistant Corporate Secretary, SLM Corporation—December 2013 to February 2017; Managing Director and Associate General Counsel, Sallie Mae, Inc.—February 2010 to December 2013; Associate General Counsel, Sallie Mae, Inc.—June 2008 to February 2010

 

2023 PROXY STATEMENT        29


Executive Compensation

Compensation Discussion and Analysis

 

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CD&A Roadmap

 

 

Compensation Discussion and Analysis

     30  

CD&A Roadmap

     30  

Executive Summary

     31  

Compensation Philosophy

     32  

Named Executive Officers

     32  

Compensation Practices Summary

     33  

Stockholder Engagement & Say-on-Pay Results

     34  

Stock Performance

     35  

Highlights of Company Performance

     35  

Allocation of Compensation

     36  

Elements of Compensation

     37  

How Our Compensation Decisions Are Made

     38  

2022 Annual Incentive Plan for Named Executive Officers

     40  

2022 AIP Funding and Payout Computation

     41  

2022 NEO Long-Term Incentive Program

     43  

NEO Achievements

     44  

Vesting of the 2020 PSU Grants

     45  

Risk Assessments and Attestations of Compensation Plans

     47  

Compensation Consultant

     47  

Compensation Committee Interlocks and Insider Participation

     48  

Peer Group Analysis

     48  

Other Arrangements, Policies, and Practices Related to Executive Compensation Programs

     48  

Compensation Committee Report

     51  

 

 

30        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

Executive Summary

In this Compensation Discussion and Analysis (“CD&A”), we describe our compensation practices and programs in the context of our NEOs. It is worth noting our compensation practices and programs applicable to our NEOs in many cases also apply to senior executive employees other than our NEOs.

Our primary business is to originate and service high-quality Private Education Loans. “Private Education Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation. In 2022, approximately 369,000 families chose us as their Private Education Loan provider, more than any other private student loan lender. We originated approximately $6.0 billion of Private Education Loans in 2022, an increase of 10 percent from the year ended December 31, 2021. As of December 31, 2022, we had $19.0 billion of Private Education Loans held for investment, net, outstanding. The Private Education Loans we make to students and families serve primarily to bridge the gap between the cost of higher education and the amount funded through family income and savings, scholarships and grants, and federal financial aid. We also extend Private Education Loans as an alternative to similar federal education loan products where we believe our rates are competitive.

Our performance-based compensation programs, including the 2022 Annual Incentive Plan, which consists of (i) a short-term annual cash bonus (the “2022 AIP”), and (ii) the performance-based element of the LTIP, consisting of a grant of PSUs that vest solely based on a relative total shareholder return (“TSR”) measure that vests over a three-year period, focus our senior executives on goals that drive our financial performance while balancing risk and reward.

As discussed in more detail herein, our 2022 AIP encourages executives to focus on customer growth (through the Private Education Loan originations metric), while ensuring that such growth comes from high credit quality loans (through the private Education Loan originations metrics). Our 2022 performance-based compensation programs also include the following financial metrics: pre-tax, pre-provision, pre-operating expense income per share, operating expenses, and relative TSR.

Although the Company’s TSR performance has been positive over the last three years, payouts under our 2022 AIP were lower for 2022 than for 2021 because the Company’s performance in 2022 based on other performance metrics was not as strong as in 2021. While we achieved significant Company successes in 2022, such as (i) growing originations, (ii) expanding net interest margin, (iii) returning a significant amount of capital to stockholders, and (iv) rigorously managing expenses in an uncertain macroeconomic environment, we did not deliver on certain key Company performance metrics. Specifically, (a) charge-offs were higher than anticipated due to a combination of factors, including the previously announced credit administration practices changes the Company implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance, as well as a shortage and lack of tenured collections staff, and other operational challenges during much of 2022; and (b) earnings per share were lower than expected based on the fourth-quarter provision for credit losses of $297 million and the write down of $60 million of the value of an investment in non-marketable equity securities. Accordingly, because we continue to value a pay-for-performance philosophy that aligns compensation with Company performance, NEO payouts under the 2022 AIP were approximately 15% less than the prior year’s NEO annual incentive plan payouts, as illustrated in the “Non-Equity Incentive Compensation” column in the Summary Compensation Table on page 52. This was the case despite other accomplishments that have brought significant value to our stockholders.

We believe this continued emphasis on performance-based compensation, as well as the continued focus on share value as a key metric for equity-based compensation, should further align our executives’ compensation with the interests of our stockholders.

 

2023 PROXY STATEMENT        31


COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Philosophy

The pay-for-performance philosophy underlying our executive compensation program provides a competitive total compensation program tied to both Company and individual performance, aligned with the interests of our stockholders, and designed to attract and retain executives. For 2022, we used the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:

 

 

Tie a significant portion of the total compensation of our executives to the achievement of enterprise-wide goals that drive stockholder value.

 

 

Focus executive compensation to reward short-term performance and long-term growth and focus management on sustained success and stockholder value creation while balancing risk and financial results.

 

 

Determine executive compensation amounts without considering amounts realized (or not) from prior annual or long-term incentive compensation programs.

Named Executive Officers

For the fiscal year ended December 31, 2022, our Named Executive Officers were:

 

 

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(1)

Ms. Palmer was appointed Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank effective January 9, 2023.

 

(2)

In connection with Ms. Palmer’s appointment as Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank, Mr. Kennedy ceased serving as Chief Operational Officer and President of Sallie Mae Bank effective January 9, 2023. Mr. Kennedy’s employment with the Company was terminated without cause on March 1, 2023.

 

32        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Practices Summary

 

 

What We Do

 

 

 

    

 

 

 

What We Don’t Do

 

 

    Tie significant portions of compensation to Company performance

 

    Utilize the 2022 AIP containing a formulaic funding mechanism (based on quantitative metrics) for annual bonuses

 

    Utilize an LTIP with a significant weighting based on performance-based equity awards, including PSUs that vest solely based on relative TSR

 

    Annually review and refine all compensation programs and policies based on feedback from stockholders, our Board of Directors, our independent compensation consultant, and market best practices

 

    Mitigate risk-taking by utilizing equity awards vesting over a three-year period, while placing caps on potential payments and utilizing a one-year holding period following the vesting of PSUs granted in 2021, 2022 and 2023

 

    Maintain an adjustment policy (that includes clawbacks) with respect to incentive-based compensation, and retain clawback provisions with respect to equity-and cash-based awards

 

    Require significant share ownership by the CEO, Executive Vice Presidents, and Senior Vice Presidents

 

    Compensation Committee, comprised only of independent directors, determines achievement of the funding metrics and individual performance of our NEOs pertaining to the cash payouts under the 2022 AIP, as well as all aspects of their compensation and incentives

 

    Annually assess risk of significant employee incentive compensation plans

 

    Retain an independent compensation consultant to advise on market practices and specific compensation programs

 

   

 

û   No individual change-in-control agreements

 

û   No “single-trigger” change-in-control agreements

 

û   No excise tax gross-ups

 

û   No hedging or pledging of Common Stock

 

û   No single-trigger accelerated settlement of equity awards

 

û   No above-market returns on deferred compensation plans

 

û   No pension benefits provided

 

 

2023 PROXY STATEMENT        33


COMPENSATION DISCUSSION AND ANALYSIS

 

Stockholder Engagement & Say-on-Pay Results

Stockholder Engagement

 

 

LOGO

We engage with our stockholders and proxy advisory firms throughout the year and provide stockholders with an annual opportunity to cast an advisory say-on-pay vote. At our 2022 annual meeting of stockholders, approximately 98.6 percent of the votes present voted in favor of our say-on-pay proposal. Through our stockholder engagement and strong say-on-pay vote, we gathered important information on how our compensation policies could continue to improve and continued practices that encourage sustainable long-term growth. 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 metrics and goals pursuant to the AIP and (ii) award a significant percentage, set at 50 percent, of each NEO’s LTIP in the form of PSUs. Stockholder engagement and the outcome of the say-on-pay vote results will continue to inform future compensation decisions. Over the last five years, stockholders have strongly supported our executive compensation program, with 89% or more of the votes cast in support of the program each year.

Historical Say-on-Pay Vote

 

LOGO

 

    

Annual Meeting Year

   2018      2019      2020      2021      2022  

For Say-on-Pay Vote

     92.2      96.0      94.4      89.3      98.6

 

34        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

Stock Performance

Our stock generated a three-year total return for stockholders of 95.7 percent from 2019 through 2022, compared to 3.2 percent for our peer group of companies, 23.2 percent for the S&P Supercomposite Consumer Finance Sub Industry Index, and 26.2 percent for the S&P 400 Regional Bank Sub-Industry Index. As of December 31, 2022, we ranked in the 90th percentile of total returns for the three-year period of our peer group.

Total Shareholder Return

12/31/19-12/31/22

 

 

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*

For the full roster of members of our peer group, please refer to the section below on page 48 entitled “Peer Group Analysis.”

Over the last three years, Total Assets have decreased by 11.9 percent and GAAP Diluted Earnings Per Common Share has increased by 35 percent.

Highlights of Company Performance

 

 

2022 Net Income Attributable to Common Stock (calculated in accordance with Generally Accepted Accounting Principles (“GAAP”)) of $460 million, as compared to $1,156 million in the prior year.

 

 

$1.76 GAAP Diluted Earnings Per Common Share for 2022, as compared to $3.61 for the prior year.

 

 

Private Education Loan Originations of $6.0 billion in 2022, as compared to $5.4 billion in 2021, a 10 percent increase year-over-year.

 

 

Private Education Loan held for investment portfolio, net, totaled $19.0 billion as of December 31, 2022, as compared to $19.6 billion as of December 31, 2021, a 3.1 percent decrease year-over-year.*

 

 

2022 Full-Year Net Interest Margin of 5.31 percent, up from 4.81 percent in Full-Year 2021.

 

 

40 million shares of Common Stock were repurchased in 2022, a 14 percent reduction in total Common Stock outstanding since January 1, 2022.

 

 

Total Assets of $28.8 billion as of December 31, 2022, as compared to $29.2 billion as of December 31, 2021.**

 

*

The decrease in the Private Education Loan portfolio is primarily related to loan sales during 2022 and an increase in the allowance for loan losses during 2022 primarily as a result of new loan commitments made during the period, slower prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded for loans sold.

 

**

The decrease in Total Assets from 2021 to 2022 was primarily due to the decrease in the Private Education Loan portfolio, noted above.

 

2023 PROXY STATEMENT        35


COMPENSATION DISCUSSION AND ANALYSIS

 

Allocation of Compensation

The charts below illustrate, for our CEO and separately for the other NEOs in aggregate, the percentage of 2022 compensation that consisted of base salaries, target annual bonuses (determined and paid in cash in early 2023), and LTIP awards of RSUs and PSUs granted in early 2022.

 

 

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36        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

Elements of Compensation

The compensation program in 2022 for our NEOs consisted of seven elements. These elements, as well as the reasons why each was chosen and the ways in which each achieves our compensation objectives, are described below:

 

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2023 PROXY STATEMENT        37


COMPENSATION DISCUSSION AND ANALYSIS

 

How Our Compensation Decisions Are Made

 

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Participant

  

Roles

 

Board of Directors

  

•  Independent members establish CEO’s compensation based on findings and recommendations of Compensation Committee and Independent Board Chair.

 

•  Receives report from Compensation Committee with respect to annual AIP target achievements, bonus pool funding, and PSU progress.

 

Compensation Committee

  

•  Sets AIP and PSU targets and approves NEO individual performance goals at the beginning of each year.

 

•  Establishes annual long-term, equity-based incentive plan awards for employees, including NEOs, and establishes related performance-based metrics.

 

•  Retains independent compensation consultant on annual basis.

 

•  Establishes peer group for comparative compensation data purposes.

 

•  Participates with Independent Board Chair in the annual performance and compensation review of CEO and recommendation to the Board of Directors.

 

•  Reviews and approves all aspects of NEO compensation, excluding the CEO.

 

•  Reviews and recommends CEO compensation to the Board of Directors for approval.

 

•  Approves and/or certifies annual achievement of AIP targets, PSU targets, aggregate AIP bonus pool, and NEO individual performance goals.

 

•  Reviews compensation of covered employees consisting of senior executive officers and other significant risk takers as defined by management.

 

•  Reviews and/or approves AIP and LTIP awards to all eligible employees.

 

Independent Board Chair

  

•  Participates in development and delivery of CEO’s performance and compensation review.

 

Compensation Committee Chair 

  

•  Participates in development and delivery of CEO’s performance and compensation review.

 

Chief Executive Officer

  

•  Reviews performance of all other NEOs with Compensation Committee and makes recommendations with regard to their salaries, bonuses, and LTIP awards.

 

•  Participates with Compensation Committee in final review and/or approval of AIP and LTIP awards to all eligible employees, other than the CEO.

 

Compensation Consultant

  

•  Assists the Compensation Committee in the review and oversight of all aspects of our executive compensation programs, particularly as they relate to the development and interpretation of peer group membership, compensation data, and the design and implementation of executive compensation programs in light of prevailing regulatory and market practices.

 

Chief Risk Officer

  

•  Conducts a (i) risk assessment prior to the adoption of employee incentive compensation plans to identify potential material risks that may be created by such plans;(ii) quarterly risk review of performance against incentive compensation plans; and (iii) backward-looking review and attestation of the achievement of metrics associated with incentive compensation plans and the method by which the results were achieved, prior to payment pursuant to those plans.

 

Audit Committee

  

•  With the Compensation Committee, reviews and approves the goals and compensation of the Chief Audit Officer.

 

Financial Risk Committee

  

•  Reviews the goals and compensation of the Chief Risk Officer.

 

Operational and Compliance Risk Committee

  

•  Reviews the goals and compensation of the Chief Risk Officer.

 

38        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

In establishing compensation levels and structures, policies, and performance for 2022, the Compensation Committee also considered the results of the 2022 annual meeting of stockholders “say-on-pay” advisory vote of stockholders, which received the approval of approximately 98.6 percent of the holders of the Common Stock present or represented, and entitled to vote thereon, and recommendations from stockholders as part of our stockholder outreach. Given the results of the stockholder advisory vote, the Compensation Committee’s ongoing review of our compensation programs, and feedback from our stockholders, the Compensation Committee believes our existing executive compensation programs effectively align the interests of our NEOs with our short-term and long-term goals.

Base Salary Determinations

The following factors are considered in determining any base salary adjustments for our NEOs:

 

 

Scope and responsibility of the NEO’s position;

 

 

Achievement of annual business goals, and individual performance goals;

 

 

Overall compensation paid by competitors for comparable positions;

 

 

Recruitment, retention and development of leadership talent; and

 

 

The appropriate balancing of each NEO’s base salary against his or her incentive compensation.

Based on these factors, our NEOs’ base salaries were adjusted during fiscal year 2022 as follows:    

LOGO

 

    

Named Executive Officer

   2021 Base
Salary ($)
     2022 Base
Salary ($)
     %
Increase
 

Jonathan W. Witter

     950,000        1,100,000        15.8

Steven J. McGarry

     500,000        515,000        3.0

Kerri A. Palmer

     550,000        566,500        3.0

Daniel P. Kennedy

     475,000        489,250        3.0

Donna F. Vieira

     475,000        489,250        3.0

The increase of each of the NEO’s base salary was intended to (i) ensure his or her compensation remains competitive with the market and (ii) recognize his or her respective performance as well as the Company’s performance in 2021.

 

2023 PROXY STATEMENT        39


COMPENSATION DISCUSSION AND ANALYSIS

 

2022 Annual Incentive Plan for Named Executive Officers

    

LOGO

 

    

 

 

The following are highlights of the 2022 AIP:

 

•  The following four funding metrics were utilized under the 2022 AIP at the following weightings:

 

•  Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share* (40 percent)

 

•  Private Education Loan Originations (25 percent)

 

•  Operating Expenses (25 percent)

 

•  Net Charge-Offs (10 percent)

 

•  Each NEO in the 2022 AIP had an established target bonus opportunity as set by the Compensation Committee, with no guaranteed minimum (i.e., the actual bonus payout could be 0 percent of target).

 

•  Included a clawback and risk adjustment provision.

 

•  Chief Risk Officer completed a risk assessment and attestation of the 2022 AIP as well as quarterly qualitative risk reviews of the performance against the 2022 AIP funding metrics.

 

•  Under the 2022 AIP, the NEOs’ annual bonuses were paid in cash.

 

*  See “Appendix A – Reconciliation of Non-GAAP Financial Measures” for a more detailed explanation of “Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share” and a reconciliation to GAAP diluted earnings per share.


Annual Incentive Plan Goal Setting

Each year, management develops a rigorous business plan that reflects the Company’s strategy for achieving operating and financial results to enhance franchise value while prudently growing our business. The Company’s business plan was the source of the performance goals approved by the Compensation Committee for purposes of setting our 2022 AIP targets and funding metrics. These performance goals were carefully analyzed and subject to considerable review by the Compensation Committee, with the advice of its independent compensation consultant.

Since establishing Sallie Mae as a stand-alone consumer bank in April 2014, we generally have been able to consistently enhance franchise value by growing assets and earnings, maintaining conservative credit standards, and providing excellent customer service. As a financial institution, our funding metrics for the 2022 AIP were designed to balance asset growth, credit quality, operating expenses, and risk management by utilizing a mix of financial metrics (pre-tax, pre-provision, pre-operating expense income per share and operating expenses), a customer growth metric (private education loan originations), and a credit quality metric (net charge-offs).

In selecting objective performance metrics and establishing challenging target, threshold, and maximum levels, the Compensation Committee considered the upcoming year’s business objectives and outlook in light of the unique dynamics of the consumer-banking sector at that point in time. Rather than only examining and relying upon the prior year’s targets and actual results—which may not reflect the current year’s changes to our strategic business plan—and challenges affecting our industry, the Compensation Committee’s goal setting considers particular and timely market trends that are likely to impact our business based on current activity, as well as our Company’s projected growth and other factors specific to our business.

Four corporate metrics were established by the Compensation Committee to determine the funding of the 2022 AIP.

 

40        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

As discussed above, these four metrics were derived from management’s 2022 objectives identified in our annual business plan. These metrics, their rationale, and the weightings at which they were set are discussed in the table below:

 

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METRIC

   WEIGHTING     RATIONALE FOR USING EACH METRIC

Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share

     40  

This is a primary metric used by management to measure internally the Company’s performance for the year. This measure allows management to evaluate the Company’s performance and ability to generate earnings from its primary business.

 

Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share is a non-GAAP measure. The determination of Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share for 2022 starts with GAAP diluted earnings per common share for 2022, increases that amount by (i) the impact of the GAAP provision for credit losses per common share for 2022, (ii) the impact the GAAP total non-interest expense per common share for 2022, (iii) the impact of the GAAP income tax expense per common share for 2022, and (iv) the impact of GAAP preferred stock dividends per common share for 2022. See Appendix A – Reconciliation of Non-GAAP Financial Measures for a more detailed explanation of Non-GAAP “Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share” and a reconciliation to GAAP diluted earnings per common share.

 

For 2022, the Compensation Committee approved a target of $7.15 for Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share. The 2022 target was set using, among other items, the gain expected to be recognized by the Company on the potential sale of certain Private Education Loans in 2022 and the expected impact of potential share repurchases in 2022.

Private Education Loan Originations

     25  

This measurement serves as a key indicator of the trajectory of our business, including our future earnings and asset growth.

 

For 2022, the Compensation Committee approved a target of $5.95 billion for Private Education Loan Originations, a 4.4 percent increase from the $5.7 billion target in 2021, due to the increase in students returning to campus.

Operating Expenses

     25  

This is a key measurement to evaluate the expense discipline of the Company regarding costs attributable to running our business.

 

For 2022, the Compensation Committee approved a target of $560 million for Operating Expenses, a 5.7 percent increase from the $530 million target in 2021, due to increased spending to drive strategic initiatives and loan volume as well as invest in human capital.

Net Charge-Offs

     10  

This metric is used to measure the credit performance of our loan portfolio, a significant indicator of the health of our business.

 

For 2022, the Compensation Committee, approved a target of $265 million for Net Charge-Offs, a 1.9 percent decrease from the $270 million target in 2021, which was forecasted using historical roll rate performance applied to expected Private Education Loan repayment balances.

Minimum, target, and maximum achievement levels were set for each performance metric and a weight assigned to each performance metric based on its relative importance to our overall operating plan. Our NEOs were each eligible to receive bonuses up to a stated maximum percentage of their base salary, not to exceed $5 million, assuming the initial funding threshold was achieved.

2022 AIP Funding and Payout Computation

In May 2022, the Compensation Committee established the bonus pool funding metrics. In February 2023, the Compensation Committee, including the independent Board Chair, reviewed our relative achievement of the previously established bonus pool funding metrics, and after discussions with our CEO, determined that for the year ended December 31, 2022 the bonus pool should be funded at 94.9 percent based on the achievement of the four funding metrics as summarized in the table below.

 

2023 PROXY STATEMENT        41


COMPENSATION DISCUSSION AND ANALYSIS

 

Application of the 2022 AIP funding score, based on the four funding metrics approved in May 2022, resulted in the following:

(Dollars in Millions, except per share amounts)

 

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Funding Metric

   Min      Target      Max     

Actual

Performance

   

Award

Factor

    Weighting    

Funding
Metric

Score

 

Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share

   $ 6.40      $ 7.15      $ 7.90      $ 7.20 (1)      107     40     42.8

Private Education Loan Originations

   $ 5,500      $ 5,950      $ 6,500      $ 5,975       105     25     26.3

Operating Expenses

   $ 610      $ 560      $ 510      $ 558       103     25     25.8

Net Charge-Offs(2)

   $ 290      $ 265      $ 240      $ 390       0     10     0

Total

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    94.9

 

(1)

Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share is a Non-GAAP metric under the 2022 AIP that is derived from GAAP net income. In considering the achievement of the Pre-Tax, Pre-Provision, Pre-Operating Expense Income Per Share metric under the 2022 AIP, the Compensation Committee, when reviewing the funding of the 2022 AIP, approved certain modifications to the calculation of this Non-GAAP metric to omit the negative impact of deterioration in the valuation of certain non-marketable securities owned by the Company. Those modifications resulted in the actual performance under the modified Non-GAAP metric used for purposes of the funding of the 2022 AIP changing from $6.97 to $7.20. See Appendix A for a reconciliation.

 

(2)

The Company did not achieve the Net Charge-Offs target as a result of a combination of factors, including the previously announced credit administration practices changes the Company implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance, as well as a shortage and lack of tenured collections staff, and other operational challenges during much of 2022.

With a 2022 AIP funding score of 94.9 percent, the Compensation Committee assessed each NEO’s individual performance against outcome-based goals as further detailed in the section titled “NEO Achievements” below. Each NEO’s respective individual performance was assessed during the annual performance review and covered employees risk review, in the following three areas: (i) delivering against investor expectations; (ii) executing our strategic imperatives; and (iii) enhancing the general strength of the organization. With respect to the 2022 AIP, as in prior years, the Compensation Committee had discretion to increase or reduce any bonus amount, including down to zero, that would otherwise be earned or payable to any participant and to take into account assessment of any other additional factors. The annual bonus payment to each NEO under the 2022 AIP is set forth below.

 

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Named Executive Officer

  

Target Bonus

as a % of

Base Salary

   

2022

Target Bonus
$ Amount

     2022 AIP
Payout
 

Jonathan W. Witter

     150   $ 1,650,000      $ 1,320,000  

Steven J. McGarry

     150   $ 772,500      $ 733,875  

Kerri A. Palmer

     125   $ 708,125      $ 920,563  

Daniel P. Kennedy

     125   $ 611,563      $ 489,250  

Donna F. Vieira

     125   $ 611,563      $ 672,719  

 

42        SLM CORPORATION


COMPENSATION DISCUSSION AND ANALYSIS

 

2022 NEO Long-Term Incentive Program

In connection with our 2022 NEO LTIP awards, the Compensation Committee utilized a combination of (i) 50 percent RSUs vesting in one-third increments over each anniversary of the grant date, and (ii) 50 percent PSUs vesting in 2025 upon certification by the Compensation Committee as to the achievement of the relative TSR performance metric with a one-year holding period after vesting as described in more detail below, Our 2022 LTIP grants are intended to provide long-term incentive and performance-based compensation to our NEOs in order to retain and attract highly qualified executives and tie their performance to the performance of our Company, thus aligning their interests with the interests of our stockholders.

 

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•  For the NEOs, including Mr. Witter, we granted PSUs that:

 

•  vest between 0 percent and 200 percent in 2025 based on the Company’s relative TSR from February 18, 2022 to February 18, 2025;

 

•  vest upon the Compensation Committee’s determination of actual performance relative to pre-established targets; and

 

•  require a one-year holding period immediately following the vesting date of the PSUs.

Relative TSR

We believe relative TSR, the sole PSU performance metric, is important because it aligns the interests of our management with those of our stockholders. Our relative TSR will be evaluated by comparing the Company’s stock price performance to a defined set of comparable companies based on size, volatility, stock price correlation, and industry.

We annually review the metrics (and related target levels) used in our long-term incentive programs to ensure they remain aligned with our strategic plan and the interest of our stockholders. The PSU goal is derived from a rigorous process that involved input and discussions among the Compensation Committee, our CEO, human resources, finance personnel, risk management, legal, and the Compensation Committee’s independent compensation consultant.

The table below sets forth the value of LTIP awards granted in February 2022(1):

 

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Named Executive Officer

  

2022 LTIP

RSUs

($)

    

2022 LTIP

PSUs(2)

($)

    

2022 LTIP

Total(3)

($)

 

Jonathan W. Witter

   $ 2,500,000      $ 2,500,000      $ 5,000,000  

Steven J. McGarry

   $ 450,000      $ 450,000      $ 900,000  

Kerri A. Palmer

   $ 350,000      $ 350,000      $ 700,000  

Daniel P. Kennedy

   $ 450,000      $ 450,000      $ 900,000  

Donna F. Vieira

   $ 425,000      $ 425,000      $ 850,000  

 

(1)

The dollar value amounts of the respective LTIP awards granted to each of the NEOs in 2022 as shown in this table differ from the Summary Compensation Table and the 2022 Grants of Plan-Based Awards Table disclosure due to differences in the accounting valuation of the equity awards on the grant date.

 

(2)

PSUs granted in 2022 to NEOs are disclosed in this column at the target level. PSUs will vest between 0 percent to 200 percent in 2025 based on relative TSR from February 18, 2022 to February 18, 2025, with a one-year holding period after vesting.

 

2023 PROXY STATEMENT        43


COMPENSATION DISCUSSION AND ANALYSIS

 

NEO Achievements

Material factors considered in the Committee’s assessment of individual performance for 2022 include:

 

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NEO

   ACHIEVEMENTS

Jonathan W. Witter,

Director and Chief Executive Officer

  

•  Delivered key performance objectives including (i) growing originations and market share, (ii) expanding Net Interest Margin, (iii) executing our loan sale/share repurchase program, and (iv) rigorously managing expenses driving improvement in unit service and acquisition costs;

 

•  Successfully integrated the Nitro College acquisition by significantly enhancing our reach to current and prospective college students and their parents through financing options, tools, and resources to power confidence in their higher education journey;

 

•  Enhanced risk management capabilities across the Company through process, data, and model governance improvements as well as strengthening our risk management culture; and

 

•  Continued to positively inform the public discussion about student lending by delivering nearly 50 million impressions to key policy makers and influencers.

Steven J. McGarry,

Executive Vice President and

Chief Financial Officer

  

•  Led the Company’s efforts to create shareholder value by successfully managing (i) the sale of $3.34 billion of Private Education Loans in 2022 resulting in the Company recognizing a gain of $328 million in 2022, and (ii) the repurchase of 40 million shares of the Company’s Common Stock in 2022;

 

•  Executed the asset-backed securities program in 2022 with appropriate levels of continuity, support, transparency, and investor outreach;

 

•  Expanded the Company’s Net Interest Margin 10 percent from the year-ago period to 5.31 percent in a challenging interest rate environment;

 

•  Oversaw the Company’s appropriately managed (i) liquidity risk and strong liquidity stress testing program, (ii) capital risk and solid capital stress testing program, and (iii) market, interest rate, and model risk; and

 

•  Supported the Company’s focus on overseeing a diligent budgeting process.

Kerri A. Palmer,

Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank

(Ms. Palmer’s achievements were based on her service as the Former Executive Vice President and Chief Risk Officer during the 2022 performance year)

  

•  Led the significant progress and fundamental development and build out of the independent risk management function of the Company;

 

•  Enabled executive leadership and senior management to drive accountability through effective risk reporting to the Board of Directors by strengthening reporting processes and procedures and content quality; and

 

•  Led efforts to successfully rebuild numerous major policies, procedures, processes, and committees while still demonstrating sustainability; and

 

•  Demonstrated significant action to strengthen and upgrade the talent of the risk management function of the Company.

Daniel P. Kennedy,

Former Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank

  

•  Oversaw the execution of the Operations function meeting its 2022 goal measures, including total cost to service expense and cost to service unit cost; and

 

•  Established a successful culture working group within the Operations function to identify opportunities across all lines of the business.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

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NEO

   ACHIEVEMENTS

Donna F. Vieira,

Executive Vice President and Chief Commercial Officer

  

•  Led the Company’s origination of approximately $6.0 billion of Private Education Loans in 2022, 10 percent higher than the prior year and the highest over the previous 5-year period, while gaining market share and increasing underclassmen originations, which typically have a higher lifetime value to the Company, by 15 percent from the prior year;

 

•  Oversaw the successful integration of the Nitro College acquisition by (i) enhancing future strategic growth opportunities for the Company, (ii) expanding the Company’s digital marketing capabilities, (iii) reducing the cost to acquire customer accounts, and (iv) accelerating the Company’s progress to become a broader education solutions provider helping students to, through, and immediately after college; and

 

•  Improved tools and resources to assist students along their higher education journey that have resulted in increased engagement, positive sentiment, and correlated customer experience improvements.

The following table summarizes performance-year 2022 compensation for the NEOs as approved by the Compensation Committee:

 

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Name

   Base Salary    Annual Incentive Plan    Long Term Incentive Plan*   

Jonathan W. Witter

     $ 1,100,000      $ 1,320,000      $ 5,000,000

Steven J. McGarry

     $ 515,000      $ 733,875      $ 900,000

Kerri A. Palmer

     $ 566,500      $ 920,563      $ 700,000

Daniel P. Kennedy

     $ 489,250      $ 489,250      $ 900,000

Donna F. Vieira

     $ 489,250      $ 672,719      $ 850,000

 

*

The total LTIP dollar values as shown in this table differ from the values shown in the Summary Compensation Table on page 52 and the 2022 Grants of Plan-Based Awards Table on page 54 due to differences in the accounting valuation of the LTIP awards on the grant date.

Vesting of the 2020 PSU Grants

In 2020, 50 percent of the 2020 LTIP award granted to Mr. McGarry and Ms. Vieira in January 2020, as well as the PSU award granted to Mr. Witter in April 2020 in connection with the commencement of his employment as the Company’s CEO, consisted of PSUs that vested in February 2023 at 153.125 percent of target based on (i) cumulative charge-offs of 4.3 percent from 2020 — 2022 of the cohort of Private Education Loans first entering full principal and interest repayment status during the fourth quarter of 2019 as detailed in the table below (145 percent of the metric’s target); (ii) pre-tax, pre-provision income of $1,269,413,559 as detailed in the table below (100 percent of the metric’s target); and (iii) a relative TSR modifier in the 100th percentile as detailed in the table below (125 percent of modifier to PSU award) The tables below show the threshold, target and maximum payout percentages associated with each of the PSU performance metrics from the 2020 PSU grants:

 

2023 PROXY STATEMENT        45


COMPENSATION DISCUSSION AND ANALYSIS

 

Cumulative Charge-offs Performance Chart (50% weight) for 2020 PSU Grant

Based on Performance Period from January 1, 2020 through December 31, 2022

 

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Cumulative Charge-offs

  

Percentage of Target Award —   

PSU Payout (50% weight)   

4.2%

       150 %

4.7%

       125 %

5.2%

       100 %

5.7%

       75 %

6.2%

       50 %

6.7%

       25 %

>6.7%

       0 %

Pre-tax, Pre-provision Income December 31, 2022 Performance Chart (50% weight)

 

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Pre-tax, pre-provision December 31, 2022 Income

 

 

  

Percentage of Target Award –   

PSU Payout (50% WEIGHT)   

>$1,492,000,000

       150 %

$1,492,000,000

       150 %

$1,119,000,000 to $1,367,000,000

       100 %

$994,000,000

       50 %

<$994,000,000

       0 %

TSR Modifier based on the performance period from January 1, 2020 to December 31, 2022

 

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TSR of the Corporation relative to TSR of the Peer Group

  

Percentage of Modifier to   

Final Award of PSUs   

25%

       -25 %

>75%

       +25 %

Pursuant to the terms of the 2020 PSU awards, in February 2023, the Compensation Committee approved and certified the actual performance of (i) the cumulative charge-offs performance goal for the performance period from January 1, 2020 through December 31, 2022 relative to pre-established targets; (ii) the pre-tax, pre-provision income performance goal as of December 31, 2022 relative to pre-established targets; and (iii) the TSR modifier based on the performance period from January 1, 2020 through December 31, 2022.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Accordingly, because the 2020 PSUs vested at 153.125 percent of target, in February 2023, Mr. Witter, Mr. McGarry, and Ms. Vieira received the following number of shares of Common Stock pursuant to the vesting of their 2020 PSU grants:

 

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Name

   Target Number of
Shares of Common Stock
Pursuant to the 2020 PSU Award
     Actual Shares Number of
Shares of Common Stock
Pursuant to the 2020 PSU Award(1)
 

Jonathan W. Witter

     249,412        381,913  

Steven J. McGarry

     31,080        47,592  

Donna Vieira

     26,299        40,270  

 

(1)

Includes Dividend Equivalent Units.

Ms. Palmer and Mr. Kennedy did not receive PSUs in 2020, and thus did not have any PSU grants that vested in February 2023.

Risk Assessments and Attestations of Compensation Plans

The Chief Risk Officer (“CRO”) coordinates forward-looking risk assessments, backward-looking attestations, quarterly risk reviews of performance against incentive compensation plans, and ongoing oversight of Sallie Mae’s incentive compensation plans with a cross-functional team of Sallie Mae’s senior officers from the risk, human resources, internal audit, compliance, and legal departments. The CRO’s responsibilities include: oversight of the annual forward-looking risk assessments and backward-looking attestations of our incentive compensation plans to help ensure our employees are not incentivized to take inappropriate risks that could impact our financial position and controls, reputation, and operations; and developing policies and procedures to help ensure our incentive compensation plans are designed to achieve their business goals within acceptable risk parameters. The CRO periodically reports to the Compensation Committee on the results of the quarterly risk reviews of performance against our incentive compensation plans.

As part of the annual forward-looking risk assessment in 2022, the CRO presented conclusions to the Compensation Committee, and the Compensation Committee agreed, that with respect to our 2022 AIP and LTIP, the risks embedded in those plans were within our ability to effectively monitor and manage, properly balance risk and reward, and were not likely to promote excessive risk-taking. In addition, as part of the annual backward-looking attestation of incentive compensation plans, in the first quarter of 2023, the CRO presented a review and conclusions to the Compensation Committee that confirmed our incentive compensation plans, including the 2022 AIP and LTIP, are sufficiently risk sensitive, do not encourage excessive risk-taking, and are consistent with the safety and soundness of Sallie Mae and are otherwise consistent with applicable law and the applicable regulatory rules and guidance.

Compensation Consultant

The Compensation Committee retains an independent compensation consultant to advise on relevant market practices and specific compensation programs. A representative of the compensation consultant attended meetings of the Compensation Committee, as requested, and communicated with the Chair of the Compensation Committee. Aon’s Human Capital Solutions practice, a division of Aon PLC (otherwise known as McLagan), serves as the Compensation Committee’s compensation consultant. The compensation consultants have provided the following services, among other things:

 

 

assisting in developing a peer group of companies for benchmarking director and executive compensation;

 

 

providing market-relevant information as to the composition of director and executive compensation;

 

 

providing views on the reasonableness of amounts and forms of director and executive compensation;

 

 

assisting the Compensation Committee with incentive plan design decisions;

 

 

providing guidance on regulatory changes; and

 

 

reviewing drafts and commenting on the Compensation Discussion and Analysis and related compensation tables for the proxy statement.

 

 

2023 PROXY STATEMENT        47


COMPENSATION DISCUSSION AND ANALYSIS

 

From time to time, but no less than annually, the Compensation Committee considers the independence of the Compensation Consultant in light of SEC rules and NASDAQ listing standards. At this time, the Compensation Committee has concluded there is no conflict of interest with regard to the compensation consultant.

Compensation Committee Interlocks and Insider Participation

All members of the Compensation Committee are independent directors, and no current member is or has been an employee of Sallie Mae. During 2022, none of our executive officers served on a compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on the Compensation Committee.

Peer Group Analysis

Recognizing that the Company has a limited number of direct peer companies, the Compensation Committee works with the compensation consultant to select a peer group for purposes of considering market compensation data in determining the compensation of our CEO and other NEOs. The peer group, which is periodically reviewed and updated by the Compensation Committee, consists of companies that are similar in size (revenue and market capitalization) and in generally similar industries as the Company and with whom the Company may compete for executive talent. The following change was made to the peer group in 2022: adding SoFi Technologies, Inc., a consumer-oriented fintech / specialty lender whose pay philosophy, quantum, and mix can serve as an appropriate comparator.

The peer group utilized for purposes of setting NEO compensation components is as follows:

 

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Peer Group (Ticker)

Ally Financial Inc.(ALLY)

   LendingClub Corp. (LC)

Axos Financial Inc. (AX)

   LendingTree Inc.(TREE)

BankUnited Inc. (BKU)

   OneMain Holdings Inc. (OMF)

Commerce Bancshares Inc.(CBSH)

   Prosperity Bancshares, Inc. (PB)

Credit Acceptance Corp.(CACC)

   SoFi Technologies, Inc. (SOFI)

Enova International Inc.(ENVA)

   Synovus Financial Corp. (SNV)

F.N.B. Corp. (FNB)

   Upstart Holdings Inc. (UPST)

The Compensation Committee believes it is appropriate to continuously monitor relative compensation amounts with respect to the same peer group used by management and the Board of Directors for financial performance comparisons.

Other Arrangements, Policies, and Practices Related to Executive Compensation Programs

Share Ownership Guidelines

As of December 31, 2022, the guidelines for beneficial ownership of our Common Stock were as follows:

 

 

CEO (Mr. Witter)—six times the CEO’s annual base salary;

 

 

Executive Vice President (including Mr. McGarry, Ms. Palmer, Mr. Kennedy, and Ms. Vieira)—three times the Executive Vice President’s annual base salary; and

 

 

Senior Vice President1.5 times the Senior Vice President’s annual base salary.

The guidelines do not provide a time limit to achieve such minimum beneficial ownership of our Common Stock. However, until the guidelines are met, executives may only sell up to 25 percent of such individual’s net shares.

The guidelines encourage continued beneficial ownership of a significant amount of our Common Stock acquired through equity awards and help align the interests of senior executives with the interests of our stockholders. After

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

achieving the guidelines, executives will not be eligible to receive further equity grants if he or she sells stock and such sale would result in a decrease below the established thresholds.

All current NEOs were in compliance with the share ownership guidelines as of December 31, 2022.

Compensation Committee—Delegation of Authority

Pursuant to the Compensation Committee Charter and to the extent permitted by applicable law, rules, or regulations, the Compensation Committee may form and delegate all or a portion of its authority to subcommittees composed of one or more members of the Compensation Committee or to members of the Company’s management. Each subcommittee has the full power and authority of the Compensation Committee as it relates to matters delegated to the subcommittee. For more information regarding the Compensation Committee-Delegation of Authority relating to grants of equity, please see the section below titled “Equity Grant Policies and Practices”.

Equity Grant Policies and Practices

We generally grant equity compensation to eligible employees on an annual basis. Our Human Resources team reviews the annual LTIP program provisions and grant levels in the beginning of the first quarter of the year to coincide with the annual performance management compensation review process established by the Company for all employees. As a part of that process each year, the Human Resources team will pre-establish a grant date at the end of the performance year for grants during an open trading window to eligible employees, subject to the business considerations of the Company, as approved by the Compensation Committee. Consistent with our current practice, in 2022 the annual equity grants to all eligible employees were awarded on February 18, 2022, during an open trading window and following the Compensation Committee meeting approving such annual equity grants.

The Compensation Committee approves all grants of equity compensation to be awarded to executive officers (other than the CEO). In addition, the Compensation Committee recommends to the Board of Directors for approval all proposed grants of equity compensation to be awarded to the CEO and directors. In 2022, pursuant to the 2021 Plan, the Compensation Committee delegated limited authority to a subcommittee consisting of the CEO and Chair of the Compensation Committee to approve the annual equity grants under the LTIP to non-executive employees within the limits and budgets established as part of the annual grant program guidelines.

From time to time, the Company may find it necessary to issue equity awards to non-executive employees outside of the normal annual grant process. Accordingly, the Compensation Committee has delegated limited authority to the CEO (who is a director) to make grants to new hires as well as promotional and/or special one-time grants to employees who are not subject to Section 16(b) of the Exchange Act. Such authority is limited to a certain number of shares as determined by the Compensation Committee at the beginning of each year. For these grants, our procedures provide that such grants be made at the end of each quarter, as applicable. Any grants made by the CEO pursuant to this delegation of authority are reported to the Compensation Committee on a quarterly basis. Based on this information, the Compensation Committee determines whether the grant of such delegation of authority was appropriate and whether additional authority should be granted to the CEO. Pursuant to this delegated limited authority, the CEO is not permitted to make grants to our NEOs or persons subject to Section 16(b) of the Exchange Act.

Hedging and Pledging Prohibition

Pursuant to the Company’s Stock Trading Window Policy, we prohibit directors, executive officers, and senior management from selling Common Stock short, buying or selling call or put options or other derivatives, or entering into other transactions that have the effect of hedging the economic value of any of their beneficial ownership of our shares.

Pursuant to the Company’s Stock Trading Window Policy, we also prohibit directors, executive officers, and senior management from purchasing Common Stock on margin or otherwise pledging Common Stock as collateral for a loan.

We prohibit hedging and pledging by our directors, executive officers, and senior management because they have the greatest ability to influence the direction of the Company and have a proportionally higher equity ownership than other employees generally. Accordingly, we expect our directors, executive officers, and senior management to bear the risks and rewards of stock ownership. We believe that prohibiting hedging and pledging of Company securities by our directors, executive officers, and senior management is an important governance matter because it promotes alignment with our stockholders.

 

2023 PROXY STATEMENT        49


COMPENSATION DISCUSSION AND ANALYSIS

 

Clawback

Equity and cash bonus awards made to executives, including our NEOs, under the SLM Corporation 2021 Omnibus Incentive Plan (the “2021 Plan”) as well as the SLM Corporation 2012 Omnibus Incentive Plan (the “Predecessor Plan”) contain clawback provisions in the event of a material misstatement of our financial results and certain other events. In addition, we maintain an Incentive Compensation Adjustment Policy outlining the Compensation Committee’s authority and responsibilities to review and potentially adjust employee incentive compensation and severance payments or benefits paid under our severance plans (as described below), including reducing, eliminating, and/or clawing back incentive compensation or severance. The Compensation Committee is reviewing the final rule adopted by the SEC that implements the applicable provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to recoupment of incentive-based compensation, and the Company will amend its clawback policy when the NASDAQ adopts final listing standards in accordance with the final rule.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Exchange Act requires Sallie Mae’s executive officers and directors, as well as persons who beneficially own more than 10 percent of the Common Stock, to file reports on their holdings of and transactions in our Common Stock. Based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, we believe that during the fiscal year 2022 all required reports were filed in a timely manner.

Tax Information: Section 162(m) of the Internal Revenue Code

Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation for certain executive officers that is more than $1 million. The Compensation Committee continues to have the flexibility to pay non-deductible compensation if it believes it is in the best interests of the Company.

 

50        SLM CORPORATION


Compensation Committee Report

The components of our compensation program are in place to promote prudent management decision-making and to profitably drive the evolution of our consumer banking business, all while ensuring we motivate, reward, and retain employees. Accordingly, we have reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review and discussion, we have recommended to the Board of Directors its inclusion herein and its incorporation by reference in the Company’s Annual Report on Form 10-K for the year ending December 31, 2022.

Compensation Committee

Mark Lavelle, Chair

Mary Carter Warren Franke

Ted Manvitz

Kirsten O. Wolberg

 

2023 PROXY STATEMENT        51


Summary Compensation Table

The table below summarizes compensation paid or awarded to or earned by each of the NEOs for the fiscal years ended December 31, 2022, December 31, 2021, and December 31, 2020.

 

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Name and Principal Position

  Year     Salary
($)
    Bonus
($)
    Stock
Awards
($)(1)
    Option
Awards
($)(2)
    Non-Equity
Incentive Plan
Compensation
($)(3)
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(4)
    All Other
Compensation
($)(5)
    Total
($)
 

Jonathan W. Witter(6)

Chief Executive Officer

    2022       1,076,923             5,373,654             1,320,000             38,559       7,809,136  
    2021       950,000             2,223,345       2,000,000       1,809,750             63,967       7,047,062  
    2020       657,692             8,824,635             1,623,930                   11,106,257  

Steven J. McGarry

Executive Vice President and Chief Financial Officer

    2022       512,692             967,257             733,875             29,450       2,243,274  
    2021       500,000             500,241       449,997       900,000             29,450       2,379,688  
    2020       519,231             697,510             811,188             43,700       2,071,629  

Kerri A. Palmer(7)

Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank

    2022       563,962             752,314             920,563             29,450       2,266,289  
    2021       516,154             389,074       349,997       800,000             4,450       2,059,675  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel P. Kennedy(8)
Former Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank

    2022       487,058             967,257             489,250             25,000       1,968,565  
    2021       472,116             389,074       349,997       700,000             27,177       1,938,364  
    2020       417,308             399,993             621,212             39,250       1,477,763  

Donna F. Vieira

Executive Vice President and Chief Commercial Officer

    2022       487,058             913,505             672,719             25,000       2,098,282  
    2021       472,116             389,074       349,997       655,000             25,000       1,891,187  
    2020       467,308             590,206             621,212             39,250       1,717,976  

 

(1)

Consists of (i) the PSUs granted to NEOs in 2022, 2021, and 2020; (ii) the NEOs’ 2022, 2021, and 2020 long-term incentive awards of RSUs; (iii) in Mr. Witter’s case for 2020, the RSUs granted pursuant to his make-whole sign-on equity grant upon his commencement of employment in April 2020; and (iv) in Ms. Palmer’s case for 2021, the RSUs and PSUs granted pursuant to her commencement of employment as Chief Risk and Compliance Officer. The amounts shown are the grant date fair values of the RSUs and the PSUs and in each case are computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Additional details on accounting for stock-based compensation can be found in “Note 2—Significant Accounting Policies” and “Note 16—Stock-Based Compensation Plans and Arrangements” to the audited consolidated financial statements included in the Company’s 2022 Form 10-K. The grant date value of the PSUs granted to the NEOs in fiscal year 2022 assuming the maximum level of performance conditions will be achieved is $5,000,000 for Mr. Witter, $900,000 for Mr. McGarry, $700,000 for Ms. Palmer, $900,000 for Mr. Kennedy, and $850,000 for Ms. Vieira.

 

(2)

Represents premium priced stock options that were granted at a 15 percent premium over the closing Sallie Mae stock price on the date of the grant.

 

(3)

Represents the cash portions of the AIP (formerly the Management Incentive Plan (the “MIP”)) awards paid to the NEOs with respect to performance in 2022, 2021, and 2020. For 2022, 2021, and 2020, all AIP or MIP awards, as applicable, for the NEOs were paid 100 percent in cash.

 

(4)

The Company terminated its tax-qualified pension plan and nonqualified supplemental pension plan in 2011. The Company does not pay any above-market earnings on nonqualified deferred compensation plans.

 

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SUMMARY COMPENSATION TABLE

 

(5)

For 2022, the components of “All Other Compensation” are as follows:

 

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Name

  

Employer

Contributions to
Defined Contribution Plans
($)(a)

     Relocation
($)
    

Executive
Physical

($)

    

Total

($)

 

Jonathan W. Witter

     25,000        12,078        1,481        38,559  

Steven J. McGarry

     25,000               4,450        29,450  

Kerri A. Palmer

     25,000               4,450        29,450  

Daniel P. Kennedy

     25,000                      25,000  

Donna F. Vieira

     25,000                      25,000  

 

  (a)

Amounts credited to the Company’s tax-qualified and nonqualified defined contribution plans. The combination of both plans provides participants with an employer contribution of up to five percent of the sum of base salary plus annual performance bonus up to $805,000 of total eligible plan compensation. For information regarding amounts credited in respect of nonqualified defined contribution plans, see “Nonqualified Deferred Compensation for Fiscal Year 2022—Supplemental 401(k) Savings Plan” on page 59.

 

(6)

Mr. Witter commenced his employment with the Company as Chief Executive Officer on April 20, 2020.

 

(7)

Ms. Palmer commenced her employment with the Company as Executive Vice President and Chief Risk and Compliance Officer on January 19, 2021. Accordingly, no information is displayed for 2020. On January 9, 2023, Ms. Palmer was appointed Executive Vice President and Chief Operational Officer.

 

(8)

Mr. Kennedy ceased service as Chief Operational Officer on January 9, 2023. Mr. Kennedy’s employment was terminated without cause on March 1, 2023.

 

2023 PROXY STATEMENT        53


2022 Grants of Plan-Based Awards Table

The following table provides information regarding all plan-based awards attributable to 2022 performance, including all annual performance bonuses under the 2022 AIP (which were determined and paid in early 2023), and with respect to the 2022 LTIP awards granted on February 18, 2022: (i) three-year, annual time-vesting RSU awards; and (ii) three-year PSUs that cliff vest based on relative TSR, with a one-year holding period following the vesting date;. The awards listed in this table were granted under the 2021 Plan and are described in more detail under “Compensation Discussion and Analysis.”

 

LOGO

 

    

Name

  Award Type(1)    

Grant

Date

   

Date of

Board

or
Committee

Action

   

Estimated Future

Payouts Under
Non-Equity Incentive
Plan Awards

    Estimated Future
Payouts Under
Equity Incentive
Plan Awards
    All Other
Stock
Awards:
Number of
Shares
of Stock
or Units
(#)
   

All

Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

   

Exercise
or

Base
Price of
Option
Awards
($/
Share)

   

Grant Date

Fair Value

of Stock

and

Option

Awards

($)(2)

 
 

Thresh
old

($)

   

Target

($)

   

Maximum

($)

   

Thresh
old

(#)

   

Target

(#)

   

Maximum

(#)

 

Jonathan W. Witter

    2022 LTIP RSU       2/18/22       2/16/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    124,750      

 

 

 

 

 

   

 

 

 

 

 

    2,499,990  
    2022 LTIP PSU       2/18/22       2/16/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    131,578       197,367      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    2,873,664  
    2022 AIP(3)       5/18/22       5/18/22    

 

 

 

    1,650,000       3,300,000    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven J. McGarry

    2022 LTIP RSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    22,455      

 

 

 

 

 

   

 

 

 

 

 

    449,998  
    2022 LTIP PSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    23,684       35,526      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    517,259  
    2022 AIP(3)       5/18/22       5/18/22    

 

 

 

    772,500       1,545,000    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kerri A.
Palmer

    2022 LTIP RSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    17,465      

 

 

 

 

 

   

 

 

 

 

 

    349,999  
    2022 LTIP PSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    18,421       27,632      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    402,315  
    2022 AIP(3)       5/18/22       5/18/22    

 

 

 

    708,125       1,416,250    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel P. Kennedy

    2022 LTIP RSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    22,455      

 

 

 

 

 

   

 

 

 

 

 

    449,998  
    2022 LTIP PSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    23,684       35,526      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    517,259  
    2022 AIP(3)       5/18/22       5/18/22    

 

 

 

    611,563       1,223,126    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donna F.
Vieira

    2022 LTIP RSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    21,207      

 

 

 

 

 

   

 

 

 

 

 

    424,988  
    2022 LTIP PSU       2/18/22       2/15/22      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    22,368       33,552      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    488,517  
    2022 AIP(3)       5/18/22       5/18/22      

 

 

 

 

 

    611,563       1,223,126      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

 

(1)

RSU and PSU awards are eligible to accrue dividends as Dividend Equivalent Units (“DEUs”), which vest on the same schedule as the underlying grant.

 

(2)

The grant date fair value of the RSU awards is determined by multiplying the original number of RSUs granted by the closing price of the Company’s Common Stock on the grant date. The Company did not issue fractional RSUs to account for the number between the grant date fair value and the amount approved by the Compensation Committee. No discounts have been applied to reflect the delayed vesting of these awards. The PSU fair value is determined by using a 20 day trading average leading up to the grant date to determine a target number of awards granted, multiplied by the fair value as determined under ASC Topic 718.

 

(3)

For Mr. Witter, Mr. McGarry, Ms. Palmer, Mr. Kennedy, and Ms. Vieira, the “Target” and “Maximum” amounts set forth in this row in the “Estimated Future Payouts under Non-Equity Incentive Plan Awards” column constitute each NEO’s target bonus and maximum bonus, respectively, potentially payable in cash under the 2022 AIP. 2022 AIP amounts were awarded in cash on February 28, 2023, and the actual amounts awarded are reported in the “Non-Equity Incentive Plan Compensation” column of the 2022 Summary Compensation Table.

 

54        SLM CORPORATION


Outstanding Equity Awards at 2022 Fiscal Year-End Table

The table below sets forth information regarding Company options and stock awards of the NEOs that were outstanding as of December 31, 2022.

 

LOGO

 

Name

   Option Awards    Stock Awards
  

Number of
Securities
Underlying
Unexercised
Options
Exercisable

(#)

  

Number of
Securities
Underlying
Unexercised
Options
Unexercisable

(#)(5)

  

Option Exercise
Price

($)

   Option
Expiration Date
  

Number of
Shares or
Units of Stock
That Have Not
Vested

(#)(1)(2)

   Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(3)

Jonathan W. Witter(4)

              441,501        17.6500        2/5/31              

 

                                   880,274        14,612,548

Steven J. McGarry

              99,337        17.6500        2/5/31              

 

                                   114,207        1,895,813

Kerri A. Palmer

              77,262        17.6500        2/5/31              

 

                                   57,997        962,737

Daniel P. Kennedy

              77,262        17.6500        2/5/31              

 

                                   81,275        1,349,172

Donna F. Vieira

              77,262        17.6500        2/5/31              
 

 

                                   100,958        1,675,906

 

(1)

The vesting dates of the NEOs’ unvested RSU awards and any underlying DEUs that were outstanding as of December 31, 2022 are:

 

LOGO

 

 

Name

   Grant Date   

# of RSUs

Underlying
Award

   # of RSUs
Vesting -
Vesting Date
2023
  

# of RSUs

Vesting -

Vesting Date
2024

   # of RSUs
Vesting -
Vesting Date
2025

Jonathan W. Witter(4)

       04/20/2020        246,819        246,819-4/20       

 

 

 

 

 

      

 

 

 

 

 

 

       02/05/2021        45,106        22,552-2/5        22,554-2/5       

 

 

 

 

 

 

       02/18/2022        128,085        42,694-2/18        42,696-2/18        42,695-2/18

Steven J. McGarry

       01/30/2020        9,929        9,929-1/30       

 

 

 

 

 

      

 

 

 

 

 

 

       02/05/2021        9,726        4,862-2/5        4,864-2/5       

 

 

 

 

 

 

       02/18/2022        22,109        7,369-2/18        7,370-2/18        7,370-2/18

Kerri A. Palmer

       02/05/2021        7,894        3,947-2/5        3,947-2/5       

 

 

 

 

 

 

       02/18/2022        17,932        5,976-2/18