SLM (SLM) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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SLM Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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LETTER FROM THE CHAIRMAN

OF THE BOARD OF DIRECTORS

May 5, 2020

Dear Fellow Stockholders:

As the premier brand for college and continuous education, Sallie Mae builds prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Education is the foundation for success and the proven pathway to economic mobility. We are proud to serve the 456,000 students and families who selected us last year as they invested in their future through education.

This year, like many other organizations, we have needed to change the way we work, socialize, and live our daily lives in the face of theCOVID-19 crisis. Our team has shown an extraordinary adaptability in the face of this ever-changing landscape. In particular, I want to recognize those employees who continue to serve our customers, develop new solutions to ensure the health and safety of our employees, keep our facilities safe, and keep our business running smoothly throughout this global pandemic.

We continue to take tangible actions to position our franchise for long-term success, including focusing our resources on key growth opportunities, providing high-quality private student loans, and offering competitive financing for grad school.

In addition, we remain committed to these values every day of the year: Connect, Thrive, Do Right, Dare to Do, and Make a Difference. Sallie Mae’s efforts to live these values are highlighted in our inaugural Corporate Social Responsibility report that was published in March 2020 and available on our website.

Finally, I am pleased to introduce Jonathan W. Witter, our new Chief Executive Officer. Jon is an industry veteran bringing nearly three decades of executive leadership, banking expertise, and operational management to Sallie Mae. He is a strategic leader with a demonstrated ability to improvetop- and bottom-line performance, while enhancing customer experience. Most recently, he served as Executive Vice President and Chief Customer Officer of Hilton, where he oversaw the company’s global brands, marketing, loyalty and partnerships, IT, and strategy teams. Prior to his role at Hilton, Jon held leadership positions at Capital One, Morgan Stanley, and Wachovia.

Our Board and management team are confident that Jon is ideally suited to lead Sallie Mae, and under his leadership, we will continue to perform and deliver on our long-term growth plans.

Please join us for the SLM Corporation (“Sallie Mae”) 2020 Annual Meeting of Stockholders (the “Annual Meeting”) on Thursday, June 18, 2020, at 11:00 a.m. Eastern Daylight Time to be held virtually via the Internet atwww.virtualshareholdermeeting.com/SLM2020.

Details of the business to be conducted at the Annual Meeting are provided in the attached Notice of Annual Meeting and proxy statement. You are being asked to vote on a number of important matters. Your vote is important, regardless of the number of shares you own, and all holders of our Common Stock are cordially invited to attend the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Availability of Proxy Materials or the proxy card you received in the mail.

Thank you for your continued support of Sallie Mae.

Sincerely,

Raymond J. Quinlan

Chairman of the Board of Directors

NOTICE OF 2020 ANNUAL MEETING

OF STOCKHOLDERS

How to Vote:

 

Your participation in the Annual Meeting is important. Sallie Mae urges you to take the time to read carefully the proposals described in the proxy statement and vote your proxy at your earliest convenience.

You may vote one of the following ways:

 

		By Telephone 1-800-690-6903
		By Internet before the meeting www.proxyvote.com
		By Mail completing and signing the proxy card enclosed and returning it in the envelope provided
		By Internet during the meeting www.virtualshareholdermeeting.com/SLM2020

By order of the Board of Directors

Richard M. Nelson

Corporate Secretary

May 5, 2020

TABLEOF CONTENTS

TABLE OF CONTENTS

2020 Proxy Statement —SLM CORPORATION

300 Continental Drive

Newark, Delaware 19713

The Board of Directors of SLM Corporation (“Sallie Mae,” the “Company,” “we,” “our” or “us”) is furnishing this proxy statement to solicit proxies for use at Sallie Mae’s 2020 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 5, 2020. In light of the coronavirus(COVID-19), for the safety and well-being of our stockholders, and taking into account the protocols of local, state and federal governments, we have determined that the Annual Meeting will be held in a virtual meeting format only (with noin-person meeting), via the Internet, atwww.virtualshareholdermeeting.com/SLM2020. For more information regarding the Annual Meeting process, please review the section entitled “Questions and Answers About the Annual Meeting and Voting” contained at the end of this proxy statement.

The proxy statement and Sallie Mae’s Annual Report on Form10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) are available at:https://www.salliemae.com/investors/shareholder-information andhttps://materials.proxyvote.com. You may also obtain these materials at the Securities and Exchange Commission (“SEC”) website atwww.sec.gov or by contacting the Office of the Corporate Secretary at the Company’s principal executive offices, located at 300 Continental Drive, Newark, Delaware 19713. Sallie Mae will provide a copy of the 2019 Form10-K without charge to any stockholder upon written request.

OVERVIEW OF PROPOSALS

This proxy statement contains three proposals requiring stockholder action, each of which is discussed in more detail below. Proposal 1 seeks the election of 12 directors nominated by the Board of Directors. Proposal 2 seeks approval, on an advisory basis, of Sallie Mae’s executive compensation. Proposal 3 seeks ratification of the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2020. Each share of Common Stock is entitled to one vote on each proposal or, in the case of the election of directors, on each nominee.

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PROPOSAL 1—ELECTIONOF DIRECTORS

PROPOSAL 1—ELECTION OF DIRECTORS

The Sallie Mae Board of Directors has nominated and recommends 12 individuals for election to our Board of Directors at the Annual Meeting. These individuals are as follows:

Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under ourBy-Laws, the Board of Directors has the authority to determine the size of the Board of Directors within that range and to fill any vacancies that may arise prior to the next annual meeting of stockholders. The Board of Directors has set the number of members at 12.

Biographical information, qualifications, and experience with respect to each director nominee appear below. In addition to fulfilling the general criteria for director nominees described in the section titled “Nominations Process,” each nominee possesses experience, skills, attributes, and other qualifications the Board of Directors has determined support its oversight and management of Sallie Mae’s business, operations, and structure. These qualifications are discussed below, along with biographical information regarding each director nominee, including each individual’s age, principal occupation, and business experience during the past five years. Information concerning each director nominee is based in part on information received from the respective director nominee and in part from Sallie Mae’s records.

All nominees appearing below have consented to being named in this proxy statement and to serve if elected. Should any nominee subsequently decline or be unable to accept such nomination to serve as a director, the Board of Directors may designate a substitute nominee or the persons voting the shares represented by proxies solicited hereby may vote such shares for a reduced number of nominees. If the Board of Directors designates a substitute nominee, persons named as proxies will vote“FOR” that substitute nominee.

OurBy-Laws provide the election of a director in an uncontested election will be by a majority of the votes cast with respect to a nominee at a meeting for the election of directors at which a quorum is present. Each share of Common Stock is entitled to one vote for each nominee. A director nominee will be elected to the Board of Directors if the number of shares voted“FOR” the nominee exceeds the number of votes cast“AGAINST” the nominee’s election. Abstentions and shares not voted on the proposal, including brokernon-votes, are of no effect.

If any director nominee fails to receive a majority of the votes cast“FOR” his or her election, such nominee will automatically tender his or her resignation upon certification of the election results. The Nominations, Governance and Compensation Committee (the “NGC Committee”) of the Board of Directors will make a recommendation to the Board of Directors on whether to accept or reject such nominee’s resignation. The Board of Directors will act on the NGC Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of certification of the election results.

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PROPOSAL 1—ELECTIONOF DIRECTORS

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

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PROPOSAL 1—ELECTIONOF DIRECTORS

Board of Directors Recommendation

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PROPOSAL 2—ADVISORY VOTEON EXECUTIVE COMPENSATION

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 2019, we submitted anon-binding vote to our stockholders to approve our executive compensation. Approximately 96.0 percent of the stockholders voted in favor of thesay-on-pay proposal. We attribute that broad support in part to our continued efforts to understand and address the feedback we received from our stockholders. Specifically, we continue to focus on performance-based compensation for our NEOs as we (i) tie a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business, and, (ii) award a greater percentage of the NEO’s long-term incentive plan equity award (“LTIP”) in the form of performance stock units (“PSUs”). In 2019, as part of our plan to increase the percentage of compensation tied to performance, we increased the amount of PSUs awarded to NEOs under the LTIP from 25 percent to 50 percent.

The compensation awarded to our former Chief Executive Officer (“CEO”), Raymond J. Quinlan, and other NEOs for 2019 recognizes the positive performance of the Company. The NGC Committee is mindful of its responsibility to align executive compensation with the overall performance of the Company, while taking into consideration the need to provide market competitive compensation in order to recruit and retain highly skilled and experienced executives. The CD&A provides a comprehensive discussion and rationale for the 2019 pay decisions made by the NGC Committee and the correlation to Company performance.

As described in the CD&A, our executive compensation programs are designed to attract, retain, and motivate our NEOs, who are important to our long-term success. Under these programs, we provide our NEOs with appropriate objectives and incentives to achieve our business goals. We believe that our compensation features demonstrate our responsiveness to our stockholders, our commitment to ourpay-for-performance philosophy, and our goal of aligning management’s interests with those of our stockholders to support the creation of long-term value.

The Board of Directors has adopted a policy providing for annual“say-on-pay” advisory votes. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, Sallie Mae is asking stockholders to approve the following advisory resolution at the Annual Meeting:

“Resolved, that Sallie Mae’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis and the related compensation tables and narrative disclosure in this proxy statement.”

This proposal to approve the resolution regarding the compensation of Sallie Mae’s NEOs requires the affirmative vote of the holders of a majority of the Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGC Committee or the Board of Directors. However, the NGC Committee will, as it has done in the past, carefully evaluate the outcome of the vote when considering future executive compensation decisions.

Board of Directors Recommendation

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PROPOSAL 3—RATIFICATIONOFTHE APPOINTMENTOFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Sallie Mae’s independent registered public accounting firm, KPMG LLP (“KPMG”), is selected by the Audit Committee of Sallie Mae’s Board of Directors (the “Audit Committee”). The Audit Committee has engaged KPMG as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2020. Representatives of KPMG are expected to be present at the Annual Meeting, and they will have the opportunity to respond to appropriate questions from stockholders and to make a statement if they desire to do so.

This proposal is put before the stockholders because the Board of Directors believes it is a good corporate governance practice to provide stockholders a vote on ratification of the selection of the independent registered public accounting firm.

For ratification, this proposal will require the affirmative vote of the holders of a majority of the shares of Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the basis for the stockholders’ vote when determining whether to continue the firm’s engagement. Even if the selection of Sallie Mae’s independent registered public accounting firm is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during 2020 if, in its discretion, it determines such a change would be in the Company’s best interests.

Board of Directors Recommendation

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CORPORATE GOVERNANCE

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:

Board Governance Guidelines

The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the NGC Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published atwww.salliemae.com under “For Investors,” and a written copy may be obtained by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, DE 19713. The Guidelines, along with Sallie Mae’sBy-Laws, embody the following governance practices, among others:

Board Leadership Structure

On April 19, 2020, in connection with the appointment of Mr. Witter as the Company’s CEO, the Board of Directors adopted a structure separating the Chairman of the Board of Directors from the CEO, which was initially reported in our Form8-K filed on March 5, 2020. Currently, Mr. Quinlan, the Company’s former CEO, serves as the Chairman of the Board of Directors (as well as the Chairman of the Sallie

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Mae Bank, our wholly-owned subsidiary (the “Bank”) Board of Directors) and will serve in this role until June 18, 2020, at which time Mr. Quinlan will no longer serve on the Board of Directors, and the Board of Directors will appoint one of the Company’s independent directors then in service to serve as the independent Chair of the Board of Directors of the Company, as well as the Chair of the Bank Board of Directors. The Board of Directors believes that, after June 18, 2020, an independent director is best situated to serve as Chair of our Board of Directors and of the Bank Board of Directors to serve as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. The Board of Directors believes that the Company is currently best served by separating the role of Chair and CEO, but the Board of Directors, consistent with the Company’s governance guidelines and subject to the Company’sby-laws, reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at a given point in time. Our Chairman currently serves, and the independent Chair after June 18, 2020 will serve, as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and shareholders. In addition to our separate Chair and CEO structure, the Board of Directors’ governance guidelines provide for a Lead Independent Director to facilitate coordination of the activities of the Company’s independent directors. This position is currently held by Paul Child, an independent director who serves as our Lead Independent Director as well as a member on three of our committees of the Board of Directors: the Audit, Risk, and Strategic Planning Committees. As Lead Independent Director, Mr. Child also attends all meetings held by our Board of Directors’ other committees. Our Lead Independent Director has historically provided strong independent leadership for the Board of Directors.

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 all of the individuals who served as a director during 2019, other than Mr. Quinlan, our former CEO, and all nominees standing for election at the Annual Meeting, other than Mr. Witter, our current CEO, are independent of Sallie Mae.

Each member of the Board of Directors’ Audit and NGC Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines.

Board Diversity

As of December 31, 2019, our Board of Directors consisted of the following:

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CORPORATE GOVERNANCE

Board Skills and Experience

Board, Committee, and Annual Meeting Attendance

Our Board of Directors met nine times in 2019. Each of the then-serving directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which he or she served. Directors are expected to attend the Annual Meeting, and twelve of thirteen of the then-serving members of the Board of Directors attended the Annual Meeting in June 2019. The only director not in attendance at the Annual Meeting in June 2019 was Jed Pitcher, who did not seekre-election to the Board of Directors at the June 2019 Annual Meeting.

Roles of the Board and Its Committees

The Board of Directors has established the following standing committees to assist in its oversight responsibilities: Audit; NGC; Risk; Strategic Planning; and Preferred Stock. Separately, the Bank Board of Directors has also established a Compliance Committee. Each committee is governed by a Board-approved written charter, which is evaluated annually and which sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.

All of our committee charters, including the charter for our NGC Committee, are available atwww.salliemae.com under “For Investors, Corporate governance.” Stockholders may obtain a written copy of any and all committee charters by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, Delaware 19713.

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CORPORATE GOVERNANCE

The following table sets forth the membership and number of meetings held for each committee of the Board of Directors as of December 31, 2019. Mr. Witter has not served on any committees since his appointment to the Board of Directors on April 20, 2020.

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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. The primary risk oversight responsibilities of each of the standing committees of the Board of Directors are as follows:

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Nominations Process

The NGC Committee considers for nomination to the Board of Directors candidates recommended by stockholders and members of the Board of Directors. The candidates are evaluated based on the needs of the Board of Directors and Sallie Mae at that time. The Board of Directors seeks representation that reflects gender, ethnic, and geographic diversity. The minimum qualifications and attributes the NGC Committee believes a director nominee must possess include:

To recommend a candidate, stockholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chair of the NGC Committee atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713. The stockholder should also include his or her contact information and a statement of his or her share ownership. The nomination deadline for the 2020 Annual Meeting has now closed. A stockholder wishing to nominate a candidate must comply with the notice and other requirements described under “Stockholder Proposals for the 2021 Annual Meeting” in this proxy statement.

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/orless-than-ten percent owner of an entity involved in the transaction (“Related Party Transactions”). Loans made in the ordinary course of Sallie Mae’s business to executive officers, directors, and their family members are considered Related Party Transactions and arepre-approved. Moreover, the Bank has also adopted written policies to implement the requirements of Regulation O of the Board of Governors of the Federal Reserve System, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be, and are, approved by the Board of Directors of the Bank. In 2019, the Company issued a credit card to Mr. Thome with a total of $10,000 of credit extended to him. Such credit card was issued in the ordinary course of business; is on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company; and does not involve more than the normal risk of collectability or present other features unfavorable to the Company. Since January 1, 2019, we have not had any other transactions with related persons required to be disclosed under Item 404(a) of RegulationS-K, and no such transactions are currently proposed.

Under the Related Party Transactions policy, the General Counsel will notify the Chair of the NGC Committee of any proposed Related Party Transaction, and the Chair of the NGC Committee will determine if approval under the policy is required. If required, the NGC Committee will then review the proposed Related Party Transaction and make a recommendation to the Board of Directors regarding whether to approve the transaction. In considering a transaction, the NGC Committee takes into account whether a transaction would be on terms no less favorable than to an unaffiliated third-party under the same or similar circumstances, among other factors.

Environmental, Social and Governance Practices

In conducting our business, we continually pursue practices that we believe will drive sustainable, long-term growth and profitability. Such “environmental, social and governance” or “ESG” practices mean different things to different investors and to the organizations that evaluate and rate ESG practices. For us, ESG practices mean we embrace the core principles of corporate responsibility and social purpose through everything we do for our customers, employees, communities, and environment. Our actions are shaped by our mission and purpose—helping families achieve the dream of a higher education. As an application of ESG practices, the Global Reporting Initiative Standards, the

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CORPORATE GOVERNANCE

Sustainability Accounting Standards Board, and the United Nations Sustainable Development Goals (“SDGs”) are considered a roadmap for corporations to serve the long-term goals of society. These SDGs include SDG4-Quality Education (“SDG 4”), which aims to ensure inclusive and quality education for all. We support the general goals of SDG 4 and agree that education is one of the most powerful and proven vehicles for sustainable development. We support the goal of universal access to quality higher education, whether it be for a degree program, continuing education, or certificate training.

At its core, education creates opportunities for individuals to realize their dreams, succeed, and lead more fulfilling and purposeful lives. Those who attend and graduate from college move forward with a wide range of personal, financial, and other lifelong benefits, including an ability to positively affect the outcomes of our most significant societal challenges.

ESG at a Glance

We describe some of our key ESG practices in this section, but more details regarding ESG can be found in our inaugural Corporate Social Responsibility Report (“CSR Report”) that was published in March 2020 and available on our website athttp://www.salliemae.com/csr. The CSR Report is not incorporated by reference herein, and is not a part of this proxy statement or the 2019 Form10-K.

Our Customers

As the premier financial brand for college and continuous education, we are in the business of building prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Along with a company-wide commitment to honesty, dependability, and integrity, we are committed to:

These commitments form the foundation of our mutual success. In addition, we are committed to helping our next generation make informed decisions about their education. After all, education in all forms is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility.

Human Capital Management and Talent Development

We value our highly-skilled employees at all levels who help us drive sustainable, long-term growth, and profitability. We express our appreciation through:

Community

At Sallie Mae, we are passionate about getting involved and giving back in the communities where we live and work. We strive to help create brighter futures by working directly withnot-for-profit organizations such as Big Brothers Big Sisters, Special Olympics, and Folds of Honor. Sallie Mae employees regularly volunteer in their communities, collecting and donating gifts to local families, educating grade school students on financial literacy and consumer finance, and packing meals for families in need.

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Environmental Stewardship and Attention to Climate Change

We continue to make improvements at our facilities as we are committed to improving the environmental sustainability of our business by using resources and materials thoughtfully, all of which have a positive environmental impact on the communities in which we operate. More broadly, our country’s environmental challenges are better and more meaningfully understood and addressed by an educated population. Sallie Mae is proud of the role we play in building a more educated and sustainable tomorrow.

Political Expenditures

Our current policy on political activities is publicly available on our website atwww.salliemae.com under “For Investors” and sets forth the principles regarding our stance on political activities. We comply with federal, state, and local lobbying registration and disclosure requirements, and we do not engage in grassroots lobbying. We work closely with the NGC Committee to review and reconsider our existing policies, procedures, and decision-making approaches to government relations and political activities.

At this time, we have one long-term, experienced employee engaged in lobbying activities exclusively related to matters that directly or indirectly affect the Private Education Loan industry and our mission. The compensation of the employee, and other executives, for time attributed to lobbying activity is reported as lobbying expenditure. That employee manages one external, bipartisan lobbying/consulting firm that assists with the same objectives, and we report the expenditures made to this firm in our lobbying disclosures. Our involvement with industry associations is limited to those associations comprised of financial institutions with similar interests.

Quarterly disclosures detailing our lobbying activities and expenditures, as required by the Lobbying Disclosure Act of 1995, are posted online by the Clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate. Disclosures relating to contributions by our Political Action Committee are posted online by the Federal Election Commission (“FEC”). We will continue to comply with all applicable laws and regulations on disclosure of those activities.

At this time, we do not believe the preparation and dissemination of any additional reports on these matters would provide any meaningful information to our stockholders. We will continue to consider the value to stockholders of additional reporting of our political activities as our activities evolve, and review this matter periodically with the NGC Committee.

The Sallie Mae Political Action Committee (“PAC”)

In June 2015, we formed the Sallie Mae PAC. All of the assets and activities of its predecessor prior to theSpin-Off (the“Spin-Off”) of Navient Corporation (“Navient”) in April 2014 were assumed and taken over by Navient in connection with theSpin-Off.

Our PAC is governed by an Advisory Board comprised of six employees, who represent different divisions within the Sallie Mae organization. The PAC’s Advisory Board reviews and approves all PAC and corporate political contributions. The PAC’s Advisory Board evaluates candidates on the basis of their views on issues that impact us or our employees. It also takes note of whether our facilities or employees reside in a candidate’s district or state.

Our PAC contributions are published on the FEC website.

Stockholder Communications with the Board

Stockholders and other interested parties may submit communications to the Board of Directors, thenon-management directors as a group, the Lead Independent Director, or any other individual member of the Board of Directors by contacting the Lead Independent Director in writing atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.

Code of Business Conduct

We have a Code of Business Conduct that applies to Board of Directors members and all employees. The Code of Business Conduct is available on our website (www.salliemae.com under “For Investors”) and a written copy is available from the Corporate Secretary. We intend to post amendments to or waivers of the Code of Business Conduct, if any (to the extent applicable to the Company’s chief executive officer, principal financial officer, principal accounting officer, or any director), at this location on our website.

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REPORTOFTHE AUDIT COMMITTEEOFTHE BOARDOF DIRECTORS

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee hereby reports as follows:

Audit Committee

Marianne M. Keler, Chair

Paul G. Child

Mary Carter Warren Franke

Mark L. Lavelle

Jim Matheson

Vivian C. Schneck-Last

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

Independent Registered Public Accounting Firm Fees for 2019 and 2018

Aggregate fees billed for services performed for Sallie Mae by its independent accountant, KPMG, for fiscal years ended December 31, 2019 and 2018, are set forth below.

Audit Fees. Audit fees include fees for professional services rendered for the audits of the consolidated financial statements of Sallie Mae and statutory and subsidiary audits, issuance of comfort letters, consents, income tax provision procedures, and assistance with review of documents filed with the SEC.

Audit-Related Fees. Audit-related fees include fees for assurance and other services related to service provider compliance reports, trust servicing and administration reports, internal control reviews, and attest services that are not required by statute or regulation.

Tax Fees. Tax fees include fees for federal and state tax compliance, and tax consultation services.

All Other Fees. All other fees for the fiscal year ended December 31, 2019 were $0. All other fees for the fiscal year ended December 31, 2018 were $0.

Pre-Approval Requirements

The Audit Committee’s charter addresses the approval of audit andnon-audit services to be provided by the independent registered public accounting firm to the Company. The Audit Committee’s charter requires all services to be provided by our independent registered public accounting firm bepre-approved by the Audit Committee or its Chair. Each approval of the Audit Committee or the Chair of the Audit Committee must describe the services provided and set a dollar limit for the services. The Audit Committee, or its Chair,pre-approved all audit andnon-audit services provided by KPMG during 2019. Reporting is provided to the Audit Committee regarding services the Chair of the Audit Committeepre-approved between committee meetings. The Audit Committee receives regular reports from management regarding the actual provision of all services by KPMG. No services provided by our independent registered public accounting firm were approved by the Audit Committee pursuant to the “de minimis” exception to thepre-approval requirement set forth in paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.

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OWNERSHIPOF COMMON STOCKBY 5 PERCENTOR MORE HOLDERS

OWNERSHIP OF COMMON STOCK BY 5 PERCENT OR MORE HOLDERS

The following table provides information about each stockholder known to Sallie Mae to beneficially own five percent or more of the outstanding shares of our Common Stock, based solely on the information filed by each such stockholder in 2020 for the year ended December 31, 2019 on Schedule 13G/A or on Schedule13F-HR, as applicable, under the Exchange Act.    

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OWNERSHIPOF COMMON STOCKBY DIRECTORSAND EXECUTIVE OFFICERS

OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning the beneficial ownership of Sallie Mae’s Common Stock by: (i) our current directors and nominees; (ii) the Named Executive Officers listed in the Summary Compensation Table; and (iii) all of the Company’s current directors and executive officers as a group. Under SEC rules, beneficial ownership for purposes of this table takes into account shares as to which the individual has or shares voting and/or investment power as well as shares that may be acquired within 60 days (such as by exercising vested stock options). Information is provided as of February 28, 2020, unless noted otherwise. As of February 28, 2020, the Company had 419,962,492 outstanding shares of Common Stock. The beneficial owners listed have sole voting and investment power with respect to shares beneficially owned, except as to the interests of spouses or as otherwise indicated.

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EXECUTIVE OFFICERS

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.

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COMPENSATION DISCUSSIONAND ANALYSIS

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

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COMPENSATION DISCUSSIONAND ANALYSIS

The compensation set forth in this CD&A, and the amounts provided by our NGC Committee and the Board of Directors in connection with the 2019 MIP and PSU grants, were determined before theCOVID-19 crisis was taken into account. The unfoldingCOVID-19 crisis, including its impact on the economy and our business, will be taken into account in reviewing and setting compensation for our NEOs on ago-forward basis.

Compensation Philosophy

Thepay-for-performance philosophy underlying our executive compensation program provides a competitive total compensation program tied to both Company and individual performance and aligned with the interests of our stockholders. We use the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:

Named Executive Officers

For the fiscal year ended December 31, 2019, our Named Executive Officers were:

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COMPENSATION DISCUSSIONAND ANALYSIS

Compensation Practices Summary

Stockholder Engagement &Say-on-Pay Results

		STOCKHOLDER ENGAGEMENT
Spring		Summer		Fall		Winter
•  Active outreach with institutional holders to discuss important governance items to be considered at Annual Meeting   •  Publish annual communications to stockholders including the proxy statement and Form10-K		•  Conduct Annual Meeting   •  Review results and feedback from Annual Meeting with institutional holders   •  Share investor feedback with the Board of Directors   •  Active outreach with institutional holders to discuss vote and follow up issues   •  Conduct annual Board of Directors assessment of governance		•  Active outreach with institutional holders to identify focus and priorities for the coming year		•  Perform peer group compensation analysis to ensure compensation is appropriate based on financial performance comparisons   •  Review governance practices and trends, regulatory developments, and our governance framework

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COMPENSATION DISCUSSIONAND ANALYSIS

We engage with our stockholders and proxy advisory firms throughout the year and provide stockholders with an annual opportunity to cast an advisorysay-on-pay vote. At our 2019 annual meeting of stockholders, approximately 96 percent of the votes present voted in favor of oursay-on-pay proposal. Additionally, in 2019 management reached out to investors owning a majority of the outstanding shares and discussed our executive compensation program and other compensation-related matters with a number of them. Through our stockholder engagement and strongsay-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 2019 MIP and (ii) award a greater percentage of each NEO’s LTIP in the form of PSUs. In 2019, we increased the amount of PSUs awarded to NEOs under the LTIP from 25 percent to 50 percent. Stockholder engagement and the outcome of thesay-on-pay vote results will continue to inform future compensation decisions.

HistoricalSay-on-Pay Vote

Stock Performance

Our stock generated a three-year total return for stockholders of negative 18.1 percent from 2017 through 2019, compared to 4.3 percent for our peer group of companies, 36.0 percent for the S&P Supercomposite Consumer Finance Sub Industry Index, and 3.0 percent for the S&P 400 Regional BankSub-Industry Index. As of December 31, 2019, we ranked in the 5th percentile of total returns for the three-year period of our peer group.

Total Shareholder Return

12/31/16-12/31/19

Over the last three years, we have increased Total Assets by 76 percent and Diluted Earnings Per Common Share by 145 percent. During this three-year period, the Total Shareholder Return for the Company was negative 18.1 percent.

Highlights of Company Performance

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COMPENSATION DISCUSSIONAND ANALYSIS

Achievement of 2019 Management Objectives

In 2019, we set out the following major goals for ourselves: (1) prudently grow our Private Education Loan assets and revenues; (2) maintain our strong capital position; (3) continue our Personal Loan¹ and credit card initiatives to increase the level of engagement with our existing customers and attract new customers; (4) manage operating expenses while improving efficiency; (5) maintain our strong governance, risk oversight and compliance infrastructure; and (6) leverage our culture to engage employees, recognize and reward contributions to business results, and develop talent to support our business strategy and growth.

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COMPENSATION DISCUSSIONAND ANALYSIS

For additional information with regard to each of these objectives and their achievement, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s 2019 Form10-K.

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COMPENSATION DISCUSSIONAND ANALYSIS

Allocation of Compensation

The charts below illustrate, for our former CEO and separately for the other NEOs in aggregate, the percentage of 2019 compensation that consisted of base salaries, annual bonuses (determined and paid in cash in early 2020), and LTIP awards of restricted stock units (“RSUs”) and PSUs granted in early 2019.

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COMPENSATION DISCUSSIONAND ANALYSIS

Elements of Compensation

The compensation program in 2019 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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COMPENSATION DISCUSSIONAND ANALYSIS

How Our Compensation Decisions Are Made

In establishing compensation levels and structures, policies, and performance for 2019, the NGC Committee also considered the results of the annual“say-on-pay” advisory vote of stockholders, which received the approval of approximately 96.0 percent of the shares present in person or represented by proxy and entitled to vote on the matter at our 2019 annual meeting of stockholders, and recommendations from stockholders as part of our stockholder outreach.

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COMPENSATION DISCUSSIONAND ANALYSIS

2019 Management Incentive Plan for Named Executive Officers

The following are highlights of the 2019 MIP:

Management 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 NGC Committee for purposes of setting our 2019 MIP targets. These performance goals were carefully analyzed and subject to considerable review by the NGC Committee, with the advice of its independent compensation consultant.

Since our April 2014 separation from Navient, we 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 targets for the 2019 MIP were designed to balance asset growth, credit quality, operating efficiency, risk management, and customer satisfaction, by utilizing a mix of financial metrics (core earnings per share and operating efficiency ratio), customer growth metrics (private credit loan originations and customer ease) and credit quality metrics (weighted average origination FICO and gross Private Education Loan defaults as a percentage of average loan balances in repayment).

In selecting objective performance metrics and establishing challenging target, threshold, and maximum levels of required performance, the NGC 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 NGC 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.

Core Net Operating Income served as the performance metric for establishing the initial funding pool at 200 percent of target for the 2019 MIP. The NGC Committee used that financial metric for the initial bonus pool funding because it reflects the Company’s performance for the year at the broadest level. The Company calculated Core Net Operating Income for 2019 as the sum of (a) Core Earnings attributable to the Company’s Common Stock and (b) preferred stock dividends paid by the Company in 2019. For a description of how we calculate “Core Earnings” and for a reconciliation of “Core Earnings” to the nearest comparable GAAP measure, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations-Key Financial Measures-Core Earnings” in our 2019 Form10-K. Based on forecasted financial results, the Core Net Operating Income target for the 2019 MIP was set at $450.8 million. This represents an increase of $90.7 million from the $360.1 million target for the 2018 MIP. Based upon the Company’s satisfaction of the Core Net Operating Income target that had been set, the 2019 MIP funding pool was funded at 200 percent of target.

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COMPENSATION DISCUSSIONAND ANALYSIS

Then, a combination of corporate metrics and individual performance goals were used to guide the NGC Committee in its exercise of downward discretion for determining the final awards to the NEOs. For the NEOs, the corporate and individual performance components of their bonus targets were 80 percent and 20 percent, respectively.

For the corporate performance portion of the 2019 MIP, six corporate performance metrics were utilized. As discussed above, these metrics were derived from management’s 2019 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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COMPENSATION DISCUSSIONAND ANALYSIS

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 is achieved.

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COMPENSATION DISCUSSIONAND ANALYSIS

2019 MIP Computation

In February 2019, the NGC Committee established the bonus pool funding and corporate performance goals. In January 2020, the NGC Committee and the Lead Independent Director reviewed our relative achievement of the previously established bonus pool funding and corporate performance goals, and after discussions with our former CEO, determined that for the year ended December 31, 2019: (i) the bonus pool should be funded at the maximum level of 200 percent of target based on the achievement of Core Net Operating Income of $563.6 million; and (ii) the weighted achievement of the 2019 MIP corporate performance goals was attained at a level of 97.0 percent of the targets set under the 2019 MIP.

Application of the 2019 MIP score, based on the corporate performance goals approved in February 2019, resulted in the following outcomes:

Applying the 2019 MIP score of 97.0 percent and the NGC Committee’s assessment of each NEO’s individual achievements, which are discussed in further detail in the section titled “NEO Achievements” below, the annual bonus payment to each NEO under the 2019 MIP and its components are set forth below.

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COMPENSATION DISCUSSIONAND ANALYSIS

2019 NEO Long-Term Incentive Program

In connection with our 2019 NEO LTIP awards, the NGC Committee utilized a combination of (i) 50 percent RSUs vesting inone-third increments over each anniversary of the grant date, and (ii) 50 percent PSUs vesting in 2022 upon certification by the NGC Committee as to satisfaction of the two performance factors and TSR modifier as described in more detail below. Our 2019 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.

Cumulative Charge-offs

We believe that emphasis on maintaining the credit quality of our Private Education Loans over the next three years is of critical importance to the Company. To measure our success, we selected cumulative charge-offs of our cohort of Private Education Loans first entering full principal and interest repayment status during the fourth quarter of 2018 as the relevant PSU credit quality metric.Cumulative charge-offs are a critical focus of the Company and are, therefore, a measure used in our awards of PSUs. Accordingly, we believe that linking our equity grants to cumulative charge-offs creates an appropriate way to measure and reward performance and drive profitable growth.

Pre-Tax,Pre-Provision Income

We believe thatpre-tax,pre-provision income is an important measure of the Company’s current and future financial success. This metric measures the health of the business and reflects our ability to increase loan originations and effectively fund our loans. In addition, this metric evaluates our discipline in controlling expenses to support the Company’s loan growth.Pre-tax,pre-provision income is calculated by adding net interest income andnon-interest income (excluding the impact from indemnified tax positions and gains/losses on derivatives and hedging activities, net) less totalnon-interest expense for the year ended December 31, 2021.Pre-tax,pre-provision income is an important metric for the Company as it correlates net interest income and operating expenses, two important metrics in determining our success, and is therefore a measure used in our awards of PSUs. Accordingly, we believe that linking our equity grants topre-tax,pre-provision income creates an appropriate additional way to measure and reward long-term performance and drive profitable growth.

TSR

We believe TSR used as a modifier is important because it correlates directly with the Company’s stock price performance, which further aligns the interests of our management with those of our stockholders. Our TSR will be evaluated as compared 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 goals are derived from a rigorous process that involved input and discussions among the NGC Committee, our former CEO, the Chief Financial Officer, internal human resources, finance personnel, the NGC’s independent compensation consultant, and legal advisors.

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COMPENSATION DISCUSSIONAND ANALYSIS

The table below sets forth the value of LTIP awards granted in January 2019:

NEO Achievements

Material factors considered in the Committee’s assessment of individual performance for 2019 include:

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