Monday, February 25, 2013

CitiBank Shows How to Play

Great anecdote on crony capitalism about Jack Lew, the latest Citi employee who will be in charge of a lot of financial regulation:
As for the Citi paycheck, the story is how Wall Street has become a get-rich-turnstile for Democratic political operatives. The terms of Mr. Lew's original employment contract with Citi included a bonus guarantee if he left the bank for a "high level position with the United States government or regulatory body." 
Most companies include incentives for top employees not to leave, but in this case the contract was written to reward Mr. Lew for treating the bank like a revolving door. Citi says it likes to accommodate employees who do public service or work at nonprofits. But the Lew contract was specific about a senior job in the federal government. There would be no special payout if he left to run the Red Cross or the New York state budget office.

1 comment:

Anonymous said...

Or maybe Lew just made sure he wouldn't have to forfeit any bonus he had already been paid if he went back to the gummint.