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Large financial institutions give bonuses to their employees for taking jobs in government.
(Washington DC, November 20th, 2014) AFL-CIO President Richard Trumka today sent letters to seven large Wall Street banks calling for the banks to explain questionable compensation practices. Each bank (Morgan Stanley, Citigroup, Goldman Sachs, JP Morgan Chase, Bank of America, Wells Fargo and Lazard) provides the opportunity for additional compensation to employees who leave the bank to work for the government.
As an institutional investor, the AFL-CIO has called on each bank’s compensation committee to offer a detailed explanation of how bankers leaving their company to enter government service benefits their old employer.
"When senior executives leave Wall Street companies to work in the government, that means the loss of valuable human capital,” said Heather Slavkin Corzo, Director of the AFL-CIO’s Office of Investment. “So how is it in the interest of shareholders to allow for accelerated vesting or other incentives in exchange for leaving the company? Unless the position of these companies is that this is just a backdoor way to pay off a newly minted government official to act in Wall Street's private interests rather than the public interest, it is very difficult to see how these policies promote long-term shareholder value."
Copies of the letter can be found at the links below:
Contact: Sean Savett (202) 637-5018