Golden parachutes offer financial insiders an easy descent into government
Golden parachutes provide income when the executive leaves the company before the end of a specific period of time and – in the Financial Times – Ben McLannahan reports on top banking executives pocketing millions of dollars before taking jobs in government:
“Critics argue that such benefits, which do not apply to people quitting for other jobs in the private sector, have ensured a succession of financial insiders in senior policy positions and deferential treatment towards Wall Street”.
The revolving door
Citi is among a handful of big banks allowing government-bound staff to cash out of incentive programmes by accelerating the vesting of their stock awards. Citi has been a particularly rich source of state appointees in recent years, from Jack Lew, the Treasury Secretary, to Stanley Fischer, vice-chairman of the Federal Reserve. The latest to move was that of Antonio Weiss, a former banker now serving as a counsellor to Mr Lew, who acknowledged December that he would leave Lazard with up to $21m in unvested income and deferred compensation.
AFL-CIO, America’s biggest trade union federation which manages $94bn in assets, will begin a campaign against this practice at Citigroup’s annual shareholder meeting on Tuesday and put similar proposals to the shareholder meetings of Goldman Sachs, Morgan Stanley and JPMorgan Chase in coming weeks.
67.9% of those who voted in Switzerland’s referendum seeking constitutional limits on remuneration came out in favour of the initiative, which was passed in every canton. Swiss Justice and Police Minister Simonetta Sommaruga told reporters that the result was “the expression of widespread unease in the Swiss population about the level of salaries paid to top managers.” There is also widespread unease in the British population about such matters.
The Golden Parachute ban on excessive executive salaries and other means of compensation passed into Swiss law in 2014 but some parts only come into force this year, including the binding shareholder vote on remuneration.
Or will we need a Thomas Minder (above right) to come to the rescue?
Posted on April 27, 2015, in Admirable politician, Banking, Civil servants, Conflict of interest, Corporate political nexus, Democracy undermined, Finance, Government, Parliamentary failure, Planning, Revolving door, Vested interests and tagged AFL-CIO, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Referendum, Switzerland, Thomas Minder. Bookmark the permalink. Leave a comment.