William Daley has about $7.7 million worth of JPMorgan Chase & Co. shares that he will need to divest to take over as President Barack Obama’s chief of staff, according to administration officials and regulatory filings.
White House lawyers also are reviewing whether Daley will have to recuse himself from some White House discussions to avoid potential conflicts stemming from his work as vice chairman of JPMorgan and his memberships on the boards of Abbott Laboratories and Boeing Co., according to an administration official.
Daley held 114,414 JPMorgan shares when his selection as chief of staff was announced by Obama on Jan. 6, according to a filing with the Securities and Exchange Commission. On that day, New York-based JPMorgan also said he could retain 101,913 restricted shares and stock appreciation rights that entitled him to buy an additional 100,000 shares at $34.78 each.
The SEC filing shows that to cover the costs of exercising the options and taxes, Daley surrendered $6.3 million in shares in connection with the vesting and exercise of his restricted stock and stock appreciation rights.
The net effect was to increase his holdings by 61,264 shares to a total of 175,678, with a current market value of $7.66 million. JPMorgan rose 20 cents yesterday to $43.60 in New York Stock Exchange composite trading.
Daley’s last day at JPMorgan was Jan. 7, said company spokesman Joseph Evangelisti, and he resigned from the boards of Boeing and Abbott the same day. He may formally begin his duties as chief of staff as early as this week, White House spokesman Bill Burton said.
Daley’s background in business and finance -- he joined New York-based JPMorgan, the second-biggest U.S. bank by assets, in 2004 -- was among the reasons Obama picked him for the job.
“Few Americans can boast the breadth of experience that Bill brings to this job,” Obama said in announcing Daley’s appointment. “He possesses a deep understanding of how jobs are created and how to grow our economy.”
Daley was President Bill Clinton’s Commerce secretary from January 1997 to June 2000. He served as president of SBC Communications Inc., now AT&T Inc., for more than two years before moving to JPMorgan.
To join the White House, Daley can’t hold a specific equity, such as the JPMorgan shares, unless he seeks a waiver. Like all top federal executives, judges and members of Congress, Daley also must disclose assets, liabilities and memberships on boards to comply with conflict-of-interest rules under a 1974 ethics law. Those documents, due within 30 days of assuming the job, will give a fuller picture of Daley’s wealth.
Daley’s appointment is part of a retooling of the administration as Obama prepares an agenda for the second half of his term and gears up for a re-election campaign in 2012.
He will replace Pete Rouse, whom Obama named on Oct. 1 to fill the role on an interim basis after Rahm Emanuel resigned to run for mayor of Chicago. Daley is the brother of the city’s current mayor, Richard M. Daley, who is retiring.