Morning Briefing: Sallie Chairman Accepts Pay Cut
Anthony P. Terracciano, chairman of Sallie Mae, will take a yearly pay cut and delay some of his stock awards as the company weathers a rough time for the student lending business.
The student lender said in a filing on Monday that it had extended Terracciano's contract for an extra year, so that it now ends in January of 2012. He will recieve a cash retainer of $480,000 a year, down from $600,000, the company said.
Terracciano also delayed receiving 66,666 shares from his stock award plan by one year. In his original contract, Terracciano has the right to receive 200,000 shares of Sallie stock, to be paid out in three equal sums on the anniversary of his start date last Jan. 7.
Terracciano is the former president of First Union bank, which merged with Wachovia in 2001. Wachovia was bought by Wells Fargo last month as it teetered toward collapse.
Investors were cheered when Terracciano was named chairman of Sallie in January. But it has continued to be a rough year for the company, as the credit markets have pushed up costs for making student loans. Sallie reported a $159 million loss in the third quarter, and said it had made fewer loans.
In other news, Circuit City announced a major pullback on Monday, just in time for the holidays. The Richmond-based consumer electronics store said it was shutting down 155 U.S. stores and laying off 17 percent of its workforce.
Several of the company's vendors have begun to limit credit, including requiring payment before goods are shipped. Some vendors have also refused a traditional increase in Circuit City's credit to purchase holiday merchandise, the company said.
The company said the three Virginia stores being shut are on Chain Bridge Road in McLean, Davidson Place in Manassas and Albemarle Square in Charlottesville. The three Maryland locations going dark are on Pulaski Highway in Baltimore, Baltimore Avenue in Beltsville and 32nd Avenue in Marlow Heights.
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