Sallie Mae Execs' Handsome Payday

Fitzpatrick's windfall, of course, is in addition to the mere cash he gets. He received $2.25 million in salary and bonus last year. In addition, Fitzpatrick gets 2 million options.

He is not alone. Directors and the top five executives hold 5 million shares in the company among them, worth just over $300 million thanks to the deal. And they own another 14.9 million vested share options. The value is unknown as exercise prices are not disclosed. As of Feb. 28, Albert Lord owned 1 million shares, worth $60 million in the deal, plus another 7 million options. Exercise prices were unknown.

The beauty of it all is that thanks to the deal, shares and options vest immediately so the executives don't have to wait for years. Further details of executive compensation will surely emerge in the days ahead.

The takeover rescues Fitzpatrick and his fellow executives from the uncertainty and scrutiny of life in a public market. Until news of the takeover came last week, Sallie Mae's shares had declined by a quarter over the past year as the company faced growing troubles on several fronts. States including New York and Connecticut are currently investigating whether student loan companies have been paying universities to steer students their way.

And Washington, D.C. has been taking a sharp look at the industry. President Bush recently proposed cutting subsidies to student lenders.

Sallie Mae was launched by the federal government in 1972 to give students access to cheap college loans. Its business depends on taxpayer support. As much as 85% of the loans it makes are federally guaranteed.