Jack Lew, currently undergoing congressional vetting for the job of Treasury Secretary in the Obama administration, has come under the microscope regarding a particularly troubling clause in his contract with his former employer, the massive financial institution Citi.
According to the contract, dug up by Bloomberg News columnist Jonathan Weil, Lew would receive a retention bonus from Citigroup in the event that he didn’t quit his job, sort of like a super-severance. This means if Lew were to leave Citigroup on their terms, he would come into a hefty prize. Innocent on the surface, a closer look reveals Lew can still take in that bonus if he quit, but only if he quit for a “high level” position in the government, which accounts for one of a few limited exceptions, according to Weil.
Specifically, Lew stood to gain between $250,000 and $500,000 of Ctitigroup stock, with the contract listing $1.1 million in “salary and discretionary cash comp” from Citigroup. When compared to Lew’s salary, which he states was $350,000 last year, it is actually more than he makes each year.
Bloomberg’s Weil called the bonus an “incentive” and a “bounty” in his recent blog post, detailing the contract itself. He also spoke to a Citigroup spokesperson, Danielle Romero-Apsilos, who shrugged it off as routine, a sort of gift to those with nobler futures. According to the Citigroup rep:
“Citi routinely accommodates individuals who wish to leave the firm to pursue a position in government or nonprofit sector,” she told Weil.
For a company like Citigroup, who’s massive financial imprint on the country and internationally is unmistakable, having a former alumni with an eye on our nation’s money would be almost invaluable.
When examining the experience and past of jack Lew, having just passed through the Senate Finance Committee vote for Treasury Secretary, he is no stranger when it comes to experience in both government work and the private sector. He has served under both the Clinton and, after leaving Citi in 2009, Obama administrations, most recently as President Obama’s Chief of Staff. Lew’s appointment is pending a full Senate vote, which, despite some Republican reservation, is expected to go through due to Democratic majority.
Pinned as a ‘natural choice’ by some of his proponents, his closeness to the industry itself is privy to recent skepticism over the handling of our nation’s debt and budget. It’s a common concern to suggest that Washington D.C. and Wall Street are simply too close for the former to appropriately account for the latter.
Receiving a bonus for bridging that gap between private and government while also being the man with friends in every corner? One thing is certain. It’s certainly working out for Lew.