U.S. News

Sallie Mae Chief Exec Resigns; Financial Chief Gets Top Job

SLM, the mortgage lender commonly known as Sallie Mae, said Thomas J. Fitzpatrick, vice chairman and chief executive, is resigning to pursue other interests and being replaced by the company's chief financial officer.

Over the next few weeks, Fitzpatrick will serve the company in an advisory role to facilitate the transition, according to a company release. C.E. Andrews, Sallie Mae's executive vice president and CFO, will replace Fitzpatrick.

Sallie Mae's board thanked Fitzpatrick for his 'many years of leadership and exemplary service' and said he was one of the architects of its transformation from a government-sponsored secondary market to a diversified education finance company.

SLM last month agreed to be sold to private-equity firm J.C. Flowers & Co. and three other investors in a $25 billion deal. 'The Sallie Mae Board sought and received assurances from the Flowers group that Fitzpatrick's departure would not impact their plans to proceed with the acquisition,' according to a release.

Also last month, the nation's largest student lender disclosed that the Securities and Exchange Commission was investigating trading in SLM's stock in the planned buyout. That action is separate from a probe of sales of company stock that SLM Chairman Albert L. Lord made a few days before the Bush administration's 2008 budget proposal, which contained cuts in student-loan subsidies that could hamper Sallie Mae's profits, was made public.

Shares of SLM added 44 cents to $55.80 in Tuesday's after-hours trading.