WILMINGTON – Navient, the education loan servicing giant, has replaced its CEO Jack Remondi with a veteran American Express executive as the publicly traded company eyes a new start after several transformative years.
David Yowan, a member of the Navient board of directors and formerly corporate treasurer for American Express, was appointed president and CEO, effective May 15, replacing Remondi who has led Navient since its spun out of student lending giant Sallie Mae in 2014.
Remondi, who will not be renominated for a board seat at the annual shareholder meeting on May 25, is not retiring, according to a company spokesman, who added “the board determined now is the appropriate time for this leadership change, as we accelerate our efforts to simplify the business and identify ways to maximize growth opportunities.”
In a statement announcing the change, board chair Linda Mills said, “We are grateful to Jack for his years of service, his leadership over many significant transitions and his commitment to Navient and its employees.”
According to a U.S. Securities and Exchange Commission filing, Remondi was terminated without cause, meaning that he was laid off but not because of any misconduct.
Remondi has led through a difficult stretch for Navient though, which settled a multi-state lawsuit with attorneys general over alleged predatory loan practices for $1.85 billion in January 2022. That mega settlement came amid an activist takeover threat from Sherborne Investors Management LP, a New York-based investment advisory firm, that ended in April 2022 with Sherborne founder Edward Bramson joining the board – the firm continues to be the largest shareholder.
It was the second hostile bid in two years, having bought back $300 million in stock from Dallas-based hedge fund Canyon Partners LLC in January 2020 to quell its campaign.
In 2018, Navient rejected discussions of a $3.2 billion bid led by Canyon to acquire the company and take it private, saying it undervalued the company. After that, Canyon built up a 10% stake in the company and launched a proxy war bid on Navient, seeking to install a new slate of directors by arguing that the company was acquiring costly operations that underperformed compared to its core student-loan business.
Canyon argued that funds used in operations to serve municipal tax collections, health care bills and other debts should be used to buy back shares and boost valuation. In May 2019, the company and investor reached a ceasefire, where two jointly picked directors, Marjorie Bowen and Larry Klane, were nominated to the company’s board.
Since then, Navient offloaded 6 million U.S. Department of Education loan accounts in October 2021 that it had been servicing for revenue, choosing to instead focus on non-governmental loan servicing and asset recovery.
Yowan, who has served on the Navient board since 2017, was previously executive vice president and corporate treasurer of credit card giant American Express. He brings over 40 years of experience in risk management, balance sheet management, funding and liquidity, and in integrating financial management with business strategy, according to a company biography.
In a statement, Mills said that Yowan “brings significant financial and strategic expertise and strong leadership skills to his new role.”
“We are confident that his deep understanding of Navient’s business operations, culture, challenges and opportunities, as well as a proven track record in transformational change, will help enable us to deliver exceptional results for our customers, investors and other stakeholders,” she added.
During his time at American Express, he “played a key role” in navigating the financial crisis of 2008-2000. He also reportedly led a significant transformation of the company’s funding profile and the transition of American Express into a bank holding company.
Prior to joining American Express in 1999, Yowan spent time at Citicorp in its global consumer banking business and before that at the Ayco Corporation, now a part of Goldman Sachs. He earned a bachelor’s degree in economics from the College of William & Mary and a Master of Management from the Kellogg School at Northwestern University.
“Navient has a proven history of evolving its business to best support the financial success of its customers. I am excited to work closely with the board and management team to undertake an in-depth review of our businesses and develop impactful strategies to deliver strong results for our shareholders,” he said in a statement. “We will remain focused on and accelerate our efforts to simplify the company and make it more efficient, increase the cash flows to shareholders from our legacy loan portfolios, and identify ways to maximize the value of our growth businesses.”
According to the SEC filing, Yowan will receive an annual base salary of $800,000 and with an annual bonus program worth up to 150% of annual salary. He will also receive Navient stock valued at $1.6 million and could vest into an additional $2.4 million of shares over the next few years.
