Named Executive Officer Compensation
Exhibit 10.16
Named Executive Officer Compensation
The Compensation and Personnel Committee of the Board of Directors of SLM Corporation (the “Compensation Committee”), in consultation with the Board of Directors, set 2005 base salaries for the Corporation’s Named Executive Officers for 2004 (“NEOs”) and established the 2005 annual bonus plan as described below.
2005 Base Salaries
| NEO | 2005 Base Salaries | |||
Albert L. Lord, Chief Executive Officer and Vice Chairman | $ | 750,000 | ||
Thomas J. Fitzpatrick, President and Chief Operating Officer | $ | 600,000 | ||
Marianne M. Keler, Executive Vice President | $ | 450,000 | ||
John. F. Remondi, Executive Vice President, Corporate Finance | $ | 325,000 | ||
June M. McCormack, Executive Vice President, Guarantor Servicing and Sales | $ | 325,000 | ||
John F. Whorley, Executive Vice President, Debt Management Operations | $ | 325,000 | ||
2005 Annual Bonus Plan
The Compensation Committee established the performance bonus plan for 2005 (the “2005 Bonus Plan”) under the shareholder-approved SLM Corporation Incentive Plan. NEOs and other members of executive management are eligible for the plan. The maximum award that may be earned by any individual is the lesser of $5 million, an amount set forth in the SLM Corporation Incentive Plan, and 1 percent of the Corporation’s “core cash” net income for the year, however, the maximum bonus amount set for the Chief Executive Officer is 4 times his base salary. The maximum bonus amount for other executive officers ranges from 3.5 to 2.5 of their base salaries. The Compensation Committee will use its discretion to make actual awards based on a common set of corporate goals and a personalized set of individual performance assessments. Overall assessments are more weighted towards individual performance than corporate performance.
Corporate performance goals were set by the Compensation Committee after consideration of the 2005 business plan. The goals are directly related to key components of the 2005 business plan, but are set at a higher level. Thus, in order to achieve the corporate performance goals of the 2005 Bonus Plan, the 2005 business plan goals need to be exceeded. Five separate performance goals were set and weighted to reflect their importance. These corporate measures and their relative weighting in the overall performance score are as follows:
| Corporate Goals | Weighting | |||
“Core cash” earnings per share growth | 25 | % | ||
Preferred channel loan origination volume growth | 20 | % | ||
Fee income growth | 20 | % | ||
Operating expense control | 20 | % | ||
Cost of funds for new debt issuances | 15 | % | ||
Individual performance goals vary by position and include goals set within various business units.
