The board of SLM Corp., known in many circles as Sallie Mae, announced the appointment today of a new chairman and company CFO. They must have forgotten the other change they need to make: CEO Albert L. Lord. Mr. Lord captured considerable attention last month when, after being questioned during an analysts conference call about selling 97 per cent of his stock in the company, he turned to his PR person and said “let’s get the f**ck out of here.” That was after he told analysts they would have to pass through a metal detector to attend a company conference. Sallie Mae has been buffeted by the need to re-finance some $30 billion in debt along with slumping stock.
We are wondering, since Mr. Lord still has his job, if this is part of some trend. Selling huge amounts of company stock and uttering an expletive during a publicly broadcasted session no longer seem to be taboo, as far as SLM is concerned. What’s next? Are we to be treated to the spectacle of CEOs showing up drunk at annual meetings and trashing shareholders like some kind of Don Rickles comedy act? Maybe Jimmy Cayne’s sitting out a corporate crisis at Bear Stearns during a golf and bridge vacation last summer, and then doing whatever the Wall Street Journal reports he did involving a rather controversial tobacco substitute, will be seen as pretty innocuous.
It would be nice to think there are some standards which CEOs are expected to live by and directors will enforce. But then we are from the old school that believes CEOs should lead by example. When last we checked, that did not include the CEO dumping stock while expecting investors to hold on to theirs and dispensing profanities we wouldn’t tolerate from our children.