Obama Admin’s TPP Trade Officials Received Hefty Bonuses From Big Banks

[Pretzel_Warrior]

5. I read that. There are less nefarious reasons for such payments

Here's an interesting piece from a watchdog group as to some of the reasons for bonuses and accelerated payments to executives who leave a company to work in the public sector.

http://www.pogo.org/our-work/reports/2013/big-businesses-offer-revolving-door-rewards.html

Professor Yermack told POGO there’s another reason for companies to include “government service” clauses in their long-term pay plans. The plans were intended to deter executives from going to work for competitors, and companies carve out exceptions because joining the government isn’t the same as going to work for a rival business.


“The basic issue is that a company does not want to continue paying you while you go to work for a competitor, but they are ruling out the idea that working for the government would be a form of competition,” Yermack told POGO.

A former senior executive and government official who spoke with POGO on background echoed this point. “Most employment contracts are intended to keep the person from leaving,” he said, but “most companies take the position that going into the government isn’t the same as going to a competitor.”

The former executive said many such clauses were added in the aftermath of a revolving door scandal involving Boeing.

In the early 1980s, five employees left Boeing to accept senior government positions. The employees received “severance payments” from Boeing—$485,000 in total—because the “shifts required forgoing the higher salaries that each employee would have earned at Boeing and also severing all financial connection with the company,” according to a 1990 Supreme Court decision. (The Court held that Boeing did not illegally supplement the employees’ federal salaries because none of the employees had started working for the government at the time of the payments.)

Many employment agreements now stipulate in advance that such payments must be accelerated to executives who go to work for the government, the former executive told POGO. That way an executive doesn’t have to forfeit his long-term pay benefits if he accepts a government position before those benefits vest. These clauses “are pretty standard, particularly for anybody who’s ever been in the government,” he said.