Sallie Mae announced last week that it appointed Jack F. Remondi as the lender’s new CEO, effective immediately, succeeding Albert L. Lord, the current vice chairman and CEO who plans to retire sooner than expected.
Sallie Mae’s board of directors authorized executive management to pursue the separation of the company’s businesses into an education loan management business and consumer banking business as part of an effort to enhance long-term growth potential. Each company will initially be owned by Sallie Mae’s shareholders and business line leaders.
Remondi has served as president and COO since 2011, before which time he served as vice chairman and CFO. He has helped launch strategic initiatives, including the company’s privatization, and helped the company navigate the financial crisis.
“Our Board of Directors has determined that Jack is the one to build on Al’s long legacy of success and lead Sallie Mae through its next strategic transformation,” Sallie Mae Chairman Anthony P. Terracciano said. “Jack brings extensive knowledge about our core financial and operational competencies, and the Board and I are confident that he will achieve the important task of unlocking more value from today’s franchise by creating two, market-leading companies from the portfolio of businesses managed currently. It is a testament to Al’s leadership that we are now ready to take this next step, and I thank him for his years of service and his unwavering commitment to shareholder value.”
The business separation is expected to be effected through a tax-free distribution of common stock to company shareholders, though the details of the separation remain undetermined. The education loan business’ principal assets will likely consist of $118.1 billion in FFELP loans, $31.6 billion in private education loans and $7.9 billion of other interest-earning assets.
The consumer banking business’ assets will likely include $9.9 billion in total assets, comprised mainly of private education loans and related originations, cash and other investments and Sallie Mae’s Upromise Rewards program.