The CEO of student loan giant Sallie Mae resigned unexpectedly yesterday in the midst of a $25 billion buyout by a private equity firm. The Wall Street Journal reports that Thomas J. Fitzpatrick was pressured out to stave off Congressional criticism of the buyout by J.C. Flowers and Co, which is taking the company private. The lender's CFO will take his place.
Flowers had initially promised to retain the company's staff, but apparently balked because of ongoing scrutiny into SLM's ties to college officials and suspect marketing practices. Fitzpatrick will receive a severance package worth as much as $32 million. Shares of the company were up in after-hours trading.