Washington – SLM Corp., the nation’s largest student lender, announced Tuesday the departure of its chief executive, part of a move to reshape the company as it prepares to be taken private.
The company, commonly known as Sallie Mae, said Thom as J. Fitzpatrick, vice chairman and chief executive, is resigning to pursue other interests and is being replaced by chief financial officer C.E. Andrews, 55.
Amid a burgeoning scandal and nationwide probe of the student-loan industry, Sallie Mae has been beset on several fronts as lawmakers and regulators call for tougher standards and reduced federal subsidies for the $85 billion industry. The company agreed last month to be sold to private-equity firm J.C. Flowers & Co. and three other investors in a $25 billion deal – one of the largest private buyouts ever.
As part of the buyout, Flowers and the other investors are making changes in Sallie Mae’s corporate structure and operations.
The company’s board of directors and the Flowers firm agreed that Sallie Mae’s corporate governance couldn’t be sufficiently reformed without the removal of top management, an executive familiar with the buyout deal said Tuesday. He spoke on condition of anonymity.
SLM chairman Albert Lord also is leaving.
Fitzpatrick, 58, will receive $4.1 million in severance pay.
