Sprint, Sallie Mae Report Executive Compensation

Sprint Nextel paid Gary D. Forsee, left, $21.3 million in 2006 while Thomas J. Fitzpatrick's compensation at Sallie Mae was $16.6 million. (Andrew Harrer - Bloomberg News)

Sprint Nextel reported yesterday that chief executive Gary D. Forsee's 2006 compensation totaled $21.3 million while former chairman Timothy M. Donahue's totaled $36.2 million.

Donahue unexpectedly announced last year that he was retiring. The same day, Sprint disclosed that it had been doing millions of dollars of business with companies owned by one of Donahue's relatives. Donahue's retirement was unrelated to the disclosure, a company spokesman said at the time.

Donahue's perquisites last year included $241,303 of non-business travel on corporate aircraft; for Forsee, the tally was $192,530. The company said it required the executives to use corporate aircraft for all flights.

Sprint Nextel said it decided last year that perks such as automobile allowances and country club dues "no longer were necessary from a competitive standpoint."

New Securities and Exchange Commission pay disclosure rules taking effect this year make it difficult to compare 2006 compensation with prior years' pay. Under the new rules, the pay totals companies list in an overview chart include portions of awards spanning multiple years. For example, of the $18.4 million of stock and options included in Forsee's $21.3 million total, only $5.8 million was granted in 2006, Sprint Nextel spokesman James Fisher said.

As the annual disclosures continue pouring into the SEC, SLM Corp., the embattled student loan provider known as Sallie Mae, reported yesterday that principal executive officer Thomas J. Fitzpatrick's compensation for 2006 totaled $16.6 million.

Fitzpatrick's bonus for 2006 decreased to $2.5 million, 83 percent of the maximum he could have received, from $2.625 million in 2005 as the Reston company fell short of various performance targets. His base salary was unchanged at $750,000.

Fitzpatrick was granted stock worth $5.6 million on the grant date and options the company valued at $11.5 million. The stock vests in 2009 but must be held until Fitzpatrick retires. The options vest in batches beginning next year, provided that the stock price increases by specified amounts.

Much of Sallie Mae's business involves loans that are subsidized and guaranteed by the government.

The company faces a double threat in the political arena. Democrats argue that federal student loan programs have showered corporate welfare on private lenders, and they are seeking to reduce the role of such private middlemen. Meanwhile, the Bush administration has proposed slashing subsidies to student loan providers.

As the loan programs now stand, lenders such as Sallie Mae are "sitting on top of a sure thing," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. "The system is rigged in favor of the lender."

Sallie Mae spokesman Tom Joyce called that assessment "preposterous. . . . Our margins are razor-thin. We make less than half a penny for every dollar we lend . . . and if a student loan defaults we lose money."