Sallie Mae Names Bank Executive as Chairman

Appointment Boosts Firm's Flagging Stock

Sallie Mae yesterday named former bank executive Anthony P. Terracciano as its chairman, a title that had been held by chief executive Albert L. Lord.

The appointment boosted the student loan company's stock, which has plummeted in recent weeks, partly because of a December briefing in which Lord's lack of answers, profanity and brusque treatment of analysts shook investors' confidence.

The Reston firm's stock closed at $17.83 yesterday, up $1.16 but still far below its 52-week high of $58.

Terracciano, 68, brings substantial experience to the role as a former president of First Union, now known as Wachovia. He has also held senior positions at First Fidelity, Mellon and Chase Manhattan banks. He joined the board of District-based Riggs National in 2004 when it was under federal investigation for money-laundering, and he served as chairman of Riggs when it was acquired by PNC Financial the following year.

Sallie Mae also named a new chief financial officer and vice chairman, John F. Remondi, 45, who had been an executive vice president before leaving the company in 2005 to join a Boston investment firm. Remondi has the potential to succeed Lord as chief executive, Citigroup analyst Bradley Ball said in a report to clients yesterday.

"We view today's announcements as a step in the right direction that should help allay concerns about board oversight and management structure and succession," Ball wrote, adding that the company still faces financial uncertainties.

Although many corporate bosses serve as both chief executive and board chairman, separating the positions appeals to many investors because it can provide additional checks and balances.

"It makes for much better supervision," said Daniel T. Scalzi, chief executive of Matrix Investment Research.

Sallie Mae said it has separated the two roles for 35 years, with the exception of a recent three-week period in which Lord held both jobs. In a news release yesterday, Lord said he asked the board to consider splitting the roles again. However, the company did not say that it planned to revert to a split when it made Lord chief executive in December.

The announcements yesterday followed a series of management shuffles over the past year as the company pursued a leverage buyout at $60 per share and later as the deal unraveled.

Lord, 62, who had been serving as chairman, became executive chairman in late November. The board awarded him a two-year contract that included cash pay of $3 million per year.

With the collapse of Sallie Mae's leveraged buyout in December, Lord gained the additional title of chief executive. One of his first steps in that role was to a convene a conference call with hundreds of investors. The call became tense when Lord declined to answer questions about the company's financial outlook, and it ended abruptly with his use of an expletive.

As a result of yesterday's reorganization, Lord is vice chairman and chief executive.

The position of chief financial officer had been vacant since May, when then-chief financial officer C.E. Andrews replaced Thomas J. Fitzpatrick as chief executive.

Andrews, a veteran of the now defunct Arthur Andersen accounting firm, is now Sallie Mae's president.