David Yowan
NAVIENTAbout David Yowan
David L. Yowan (age 68) is Navient’s President & Chief Executive Officer (since May 2023) and a director since March 2017, with prior senior treasury leadership roles at American Express (EVP & Treasurer, 2006–2022; senior treasury management, 1999–2006) and Citigroup (SVP, North American Consumer Bank Treasury, 1987–1998) . 2024 performance context: Net Income was $131 million and cumulative net student loan cash flows were $1,704 million; a $100 investment measured by SEC “pay vs performance” TSR methodology was $121.41 at year-end 2024 versus $125.20 for the S&P 600 Financials peer benchmark . Under his tenure, management executed strategic actions: outsourcing loan servicing, divesting healthcare and government services businesses, and reducing shared service expenses (4Q24 shared service expense -24% YoY vs 20% goal) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Navient | President & Chief Executive Officer | 2023–present | Led simplification strategy: outsourcing servicing, divesting business processing; drove cost reductions and capital return . |
| American Express | Executive Vice President & Treasurer | 2006–2022 | Risk management, balance sheet management, asset securitization; senior leadership at the world’s largest payment card issuer . |
| American Express | Senior Treasury Management | 1999–2006 | Strategy, financial risk oversight supporting global payments operations . |
| Citigroup | SVP, North American Consumer Bank Treasury | 1987–1998 | Treasury leadership for consumer banking; capital and liquidity management . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Navient Board of Directors | Director | 2017–present | Board member; not independent; contributes finance, risk and capital markets expertise . |
Board Service and Governance
- Board service: Director since March 2017 .
- Committee roles: Member, Executive Committee; committees otherwise composed of independent directors .
- Dual-role implications: CEO is not independent; board separates Chair and CEO roles (independent Chair, Linda A. Mills) to mitigate CEO/Chair concentration risk, with regular executive sessions of independent directors .
- Attendance: Board met 23 times in 2024; all incumbent directors attended ≥92% of meetings; average 98% .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | — | $800,000 (annual rate, effective May 15, 2023) | $800,000 |
| Summary Compensation Total ($) | — | $5,062,340 | $6,104,709 |
| Salary ($) | — | $528,557 | $799,999 |
| Stock Awards ($) | — | $3,797,694 | $3,784,459 |
| Non-Equity Incentive (MIP+STIP) ($) | — | $729,833 | $1,500,000 |
| All Other Compensation ($) | — | $6,256 | $20,251 |
Performance Compensation
Annual Incentives (MIP)
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Payout Factor | Score |
|---|---|---|---|---|---|---|---|
| Adjusted Diluted “Core Earnings” EPS | 60% | $1.85 | $2.20 | ≥$2.40 | $1.19 | 0.0% | 0% |
| Adjusted “Core Earnings” Efficiency Ratio | 25% | 68.4% | 66.2% | ≤63.7% | 68.6% | 0.0% | 0% |
| Business Processing EBITDA ($mm) | 15% | $42.6 | $53.3 | ≥$58.6 | $46.2 | 66.9% | 10% |
| Overall Corporate Performance Score | — | — | — | — | — | — | 10.0% |
| Executive | 2024 Base ($) | Target % Base | Target Award ($) | MIP Paid (10.0%) ($) |
|---|---|---|---|---|
| David Yowan | $800,000 | 150% | $1,200,000 | $120,000 |
One-time Strategic Transformation Incentive Plan (STIP)
| Executive | 2024 Base ($) | Target % Base | Target Award ($) | Payout (% of Target) | STIP Paid ($) |
|---|---|---|---|---|---|
| David Yowan | $800,000 | 150% | $1,200,000 | 115% | $1,380,000 |
Key STIP achievements: outsourced ~80% of segment-level servicing expenses; transferred ~900 employees; completed rebranding for 2.7 million loans; closed healthcare sale (Sep 2024) and government services sale (Feb 2025) for total $412 million; 4Q24 shared services expense -24% YoY vs 20% goal .
Long-term Incentives (PSUs/RSUs)
| Award | Grant Date | Units | Vesting/Performance | Notes |
|---|---|---|---|---|
| 2024 RSUs | Jul 3, 2024 | 110,957 | 50% on Jul 3, 2025; 50% on Dec 31, 2025 | Vests on time and if terminated without cause/good reason per agreement . |
| 2024 PSUs (rTSR) | Jul 3, 2024 | 166,435 (target) | rTSR vs S&P 600 Financials; 0–150% payout; service condition through Dec 31, 2025 | One-year post-vesting holding requirement . |
| 2023 PSUs (rTSR) | May 15, 2023 | 84,972 (threshold reporting) | rTSR vs S&P 400 Financials; service met 12/31/24; performance to-date implied 0% payout | One-year post-vesting holding requirement . |
PSU schedule design: 2024–26 PSUs use rTSR only; 25th/50th/75th percentile → 50%/100%/150% payout, straight-line in-between; one-year post-vesting holding . 2022–24 PSUs vested at 46% of target after rTSR multiplier (80%) on a 58% score driven by ROE and net student loan cash flows performance .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total Beneficial Ownership | 586,591 shares; <1% of class . |
| Shares Outstanding | 101,848,898 . |
| Components | 453,276 RSUs/PSUs/DEUs (no voting/dispositive control); 13,396 deferred stock units . |
| Implied direct shares | 119,919 (586,591 − 453,276 − 13,396) derived from footnote . |
| Executive Stock Ownership Guidelines | CEO: lesser of 1,000,000 shares or $5 million; EVPs: lesser of 200,000 shares or $1 million . |
| Compliance Status | All NEOs compliant or within initial 5-year grace period as of proxy date . |
| Hedging/Pledging | Prohibited for directors/officers; no margin accounts or pledging; compliant in 2024 . |
| Rule 10b5-1 Plans | Pre-clearance; only during open windows; no influence on trades once adopted . |
Outstanding awards snapshot (12/31/2024):
- Yowan RSUs unvested: 113,333 units; market value $1,506,195 at $13.29 close .
- Yowan PSUs (threshold reporting; service conditions met/not met as specified): 84,972 (2023) and 84,999 (2024) units .
Employment Terms
| Provision | Term |
|---|---|
| Employment Agreement | May 15, 2023; amended Jul 3, 2024; continued employment as CEO and director nominee; restrictive covenants . |
| Severance Eligibility | Not eligible for Executive Severance Plan or Change in Control Severance Plan; no tax gross-ups . |
| Change-in-Control (CIC) | Equity vests only if awards not assumed or upon qualifying termination; double-trigger applies generally; for CEO, PSUs vest for met service condition, payout depends on performance; no CIC cash severance . |
| CIC + Termination (CEO) | Equity vesting value $1,506,195 at $13.29 close; no cash severance . |
| Termination w/o Cause or for Good Reason (CEO) | Equity vesting $1,506,195; outplacement $30,000; no cash severance . |
| Death/Disability (CEO) | Prorated vesting; total equity vesting $3,821,193 at $13.29 close . |
| Clawback | Enhanced policy covers restatements and misconduct, including supervisory misconduct; Dodd-Frank compliant clawback adopted in 2023 . |
| Perquisites | Transportation allowance included in “All Other Compensation” ($3,001 in 2024) . |
| Deferred Compensation | Aggregate balance $178,035 (2024); no above-market returns . |
Compensation Structure Analysis
- Pay mix: 87% of CEO total direct compensation is at-risk (annual incentive + PSUs/RSUs) in 2024; emphasizes equity and performance alignment .
- Metric evolution: Shift to rTSR-only PSUs for 2024–26 reflecting transformation and investor-aligned outcomes; 2025 PSUs add “Legacy Expense Reduction” metric (45%) with rTSR (55%) to reinforce cost discipline .
- Annual plan changes: 2025 MIP introduces “4Q25 Legacy Expenses” (50%) and “Critical Initiatives” (20%); reduces EPS weighting to 30%; removes Business Processing EBITDA and Efficiency Ratio .
- Discretionary/one-time incentives: 2024 STIP adopted to align incentives to strategic actions; paid at 115% of target based on execution milestones .
Director Compensation (for dual role context)
- CEO receives no additional director fees; director compensation applies to non-employee directors only .
- Independent Chair and committee retainers and annual equity retainer schedule provided; director RSUs vest quarterly; deferral options available .
Compensation Peer Group (Benchmarking)
| Item | Detail |
|---|---|
| Target positioning | Total direct compensation generally targeted between 25th percentile and median of peers, adjusted for size/complexity . |
| 2025 Peer Group Changes | Added Enova, LendingClub, Mr. Cooper, OneMain, SoFi, Synovus, Zions; removed Conduent, Fifth Third, MAXIMUS, Paychex, Western Union to reflect post-transformation business mix . |
| Relative size context | Navient: Total assets $51,789mm; Net income $131mm; Market cap $1,427mm; ranked 16th of 16 by market cap in peer set . |
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval was 98.4% in 2024, consistent with multi-year strong support .
- Shareholder engagement: >200 meetings in 2024; met holders representing >80% of active investor shares; targeted outreach post-strategic actions .
Performance & Track Record
| Measure | 2023 | 2024 |
|---|---|---|
| “Value of $100” TSR (SEC methodology) | $163.20 | $121.41 |
| Peer Group TSR (S&P 600 Financials) | $105.65 | $125.20 |
| Net Income ($mm) | 228 | 131 |
| Cumulative Net Student Loan Cash Flows ($mm) | 1,746 | 1,704 |
Strategic actions executed: servicing outsourcing agreement (transferred ~80% of segment-level expenses; ~900 employees); healthcare business sale (Sep 2024); government services sale (Feb 2025); 4Q24 shared services expenses -24% YoY .
Risk Indicators & Red Flags
- Anti-hedging/pledging policy and 10b5-1 controls reduce misalignment/insider trading risks; all directors/NEOs compliant in 2024 .
- Double-trigger CIC; no tax gross-ups; robust clawback (restatement and misconduct) .
- Related party transactions: none >$120,000 involving executives/directors, other than disclosed compensation; one family employment noted with comparable pay .
Equity Vesting Schedules (selected)
| Award | Key Dates | Amount |
|---|---|---|
| 2024 RSUs | 50% vests 7/3/2025; 50% vests 12/31/2025 | 110,957 units |
| 2024 PSUs | Performance period 7/3/2024–12/31/2026; service checkpoints 7/3/2025 and 12/31/2025 | 166,435 target units |
| 2023 PSUs | Performance period 5/15/2023–12/31/2025; service satisfied by 12/31/2024; performance to-date 0% payout | 84,972 threshold reporting |
Employment & Contracts (selected terms)
| Term | Summary |
|---|---|
| Severance | CEO excluded from Exec/CIC severance plans; others receive 1x base+bonus (exec severance) or 2x (CIC) with double trigger; pro-rated annual incentive; medical continuation; no tax gross-ups . |
| Post-termination treatment | CEO RSUs immediate vest on certain terminations; PSUs service deemed satisfied for w/o-cause/good reason; performance determines payout; outplacement $30,000 . |
Investment Implications
- Alignment: High proportion of at-risk pay with rTSR-linked PSUs and explicit cost-reduction metrics (2025 MIP/PSUs) aligns incentives with shareholder returns and expense discipline during portfolio amortization .
- Retention risk: CEO’s incremental 2024 RSUs/PSUs have service checkpoints in 2025, creating near-term retention hooks but limited long-duration vesting beyond 2026; CEO is not covered by severance/CIC cash plans, which reduces “pay for failure” risk but could elevate exit negotiation risk in stress scenarios .
- Selling pressure: Anti-hedging/pledging rules and 10b5-1 constraints mitigate opportunistic selling; beneficial ownership includes significant unvested equity (RSUs/PSUs/DEUs), implying future delivery-dependent liquidity rather than current float pressure .
- Governance: Independent Chair, committee independence, strong clawback, and double-trigger CIC are positives; board retains activist influence via Sherborne agreements but with guardrails; CEO non-independence is standard for operating leadership .
- Performance setup: 2024 STIP payout at 115% evidences execution; 2025 incentives focus on legacy expense reduction and critical initiatives (consumer lending originations, cloud migration) that are key to sustainable ROE and TSR delivery through transformation .