Citi’s Odd Bonus Payment to Jack Lew


It’s amusing to watch the Wall Street Journal editorial page try to pretend that the revolving door between Wall Street and the federal government is somehow a scandal restricted to the Democratic Party, but still, you have to admit that this tidbit about Jack Lew is damn odd:

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.

Lew is a certified budget genius with many years of government experience, so it’s hardly a surprise that Citi expected that he might leave at some point. Still, what innocent explanation is there for actively encouraging him to leave? I’d certainly like to hear the reasoning behind this.

UPDATE: This might not be as sinister as it sounds. Possible innocent explanation is here.

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