Tuesday, May 22, 2007

Fitzpatrick Out--with Cool $4 Million

CEO of Sallie Mae steps down (forced out, says Washington Post) with golden parachute full of ill-gotten gains. From Chairman Miller's statement:

“Mr. Fitzpatrick’s abrupt departure suggests that the lending industry is beginning to recognize that business as usual is no longer acceptable at Sallie Mae or any other company participating in the federal student aid programs. However, while new leadership in the industry is certainly welcome, the fact remains that simply replacing individual executives won’t stop the corrupt practices that Congress and state attorneys general have recently uncovered. ”

From the Post: J. Christopher Flowers, the investment banker who leads the takeover group, decided that the company's rocky relationships with the Democrats now in charge of Congress made keeping Fitzpatrick at the helm too risky for a company as dependent as Sallie Mae is on government subsidies, according to people familiar with the decision.

Emphasis on "dependent on government subsidies." It's time to cut off the subsidy junkies. No more dope, no methadone--cold turkey.

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