Frederick Arnold

About Frederick Arnold

Frederick Arnold (age 71) has served as an independent director of Navient since August 2018. A former investment banker and multi-time public company CFO, he brings deep finance, capital markets, and risk oversight expertise; the Board has designated him the Audit Committee financial expert. He is currently a member of Navient’s Audit Committee and Nominations & Governance Committee, and is affirmed independent under Nasdaq and company standards .

Past Roles

External Roles

No disclosed interlocks with Navient competitors, suppliers, or customers; roles are primarily in retail, SPAC, gaming, and restructuring, limiting conflict risk with Navient’s lending/servicing focus .

Board Governance

• Independence: Determined independent in 2024 and again in 2025; all Audit, Compensation, and Nominations & Governance committees comprise only independent directors .
• Committee assignments (2024): Audit Committee member; Nominations & Governance Committee member. The Board identifies Arnold as the Audit Committee financial expert (the only such designee on the committee) .
• Attendance: The full Board met 23 times in 2024; each incumbent director attended at least 92% of Board and committee meetings (average 98%). All directors attended the 2024 Annual Meeting .
• Executive sessions and structure: Independent Chair; regular executive sessions; majority voting; annual elections; robust risk oversight and annual self-evaluations .

Fixed Compensation

Program structure (reference):

• Chair retainers: Audit $35,000; Compensation $30,000; Nominations & Governance $25,000; Independent Chair +$70,000. Committee members (non-chair) +$10,000 each. Annual equity award $140,000 in restricted stock; additional $100,000 equity for Independent Chair .

Performance Compensation

• Directors may defer cash/equity under the Director Deferred Compensation Plan; equity deferrals are credited to a notional Company stock fund and paid in shares; no above‑market returns .

Other Directorships & Interlocks

Expertise & Qualifications

• Skills matrix: Executive leadership; operations/strategy; finance/accounting/capital markets; risk management; human capital; ESG; technology experience .
• Board-designated audit committee financial expert (SEC definition) .
• Extensive M&A and debt/equity financing background from investment banking career and CFO roles .

Equity Ownership

Ownership alignment and policies:

• Director stock ownership guideline: At least 4x annual cash retainer; increased minimum guideline threshold from $400,000 to $500,000 in Nov. 2021; all non-employee directors are in compliance or within 5‑year window .
• What counts: Shares held; deferred notional stock units; restricted/time-vested RSUs. Directors do not receive performance shares .
• Hedging/pledging: Prohibited for directors; policy also bars margin accounts and derivative/speculative transactions; all directors and NEOs were in compliance throughout 2024 and as of the proxy date .

Insider trades (Form 4 last 24 months):

Governance Assessment

• Strengths

  • Financial oversight: Arnold is the Board’s designated Audit Committee financial expert, reinforcing audit quality, controls, and capital allocation oversight during Navient’s transformation .
  • Independence & engagement: Independent status affirmed; Board-wide attendance ≥92% and average 98% supports robust oversight cadence .
  • Alignment: Director pay mix balanced between cash and time‑vested equity (approx. 46% cash / 54% equity in 2024), with share ownership guidelines and anti‑hedging/pledging policy; recent Form 4s are standard annual equity grants, not dispositions (Form 4 URLs above).
  • Relevant external experience: Chairs Pepco Group N.V. and LBHI; extensive restructuring, M&A, and financing background aligns with Navient’s capital and portfolio management needs .

• Potential Watch Items

  • Workload/overboarding: Arnold holds multiple chair/director roles externally; while the proxy does not flag audit committee overload (none served on >3 audit committees in 2024), continued monitoring of time commitments is prudent .
  • Related-party/pledging risks: No related-party transactions disclosed involving Arnold; anti‑hedging/pledging policy mitigates alignment risks; maintain surveillance via future proxies/8‑Ks .

• Red Flags

  • None identified specific to Arnold in 2024–2025 disclosures: no related‑party transactions, no hedging/pledging exceptions, no attendance shortfalls noted, no compensation anomalies for directors .

Director Compensation (Detail for Arnold)

Notes:

• Standard elements: Annual cash retainer ($100k), $10k per non‑chair committee; annual equity award ($140k) as restricted stock with quarterly vesting; deferral option available .

Related-Party Transactions and Conflicts

• Policy requires Audit Committee review and Board approval for >$120,000 related‑party transactions; none disclosed involving Arnold in 2024–2025. One employee relation disclosed for CFO’s relative; no Sherborne transactions beyond cooperation agreement; hedging/pledging prohibited and in compliance .

Summary Implications for Investors

• Arnold’s designation as audit committee financial expert, high Board engagement, and alignment policies support investor confidence in financial reporting and risk oversight as Navient executes cost reductions and portfolio actions.
• No disclosed conflicts or red flags tied to Arnold; equity awards are standard, time‑based, and director ownership guidelines are met, indicating adequate “skin in the game” without risk‑misaligning hedging or pledging .