What's Next for Tim Geithner?
Speculation is building over who might replace Tim Geithner as Treasury secretary if President Barack Obama wins a second term. Less attention is being paid to what Geithner -- who's made no secret of his plans to leave -- might do next.
The only thing for certain is that Geithner will return to Larchmont, New York, to join his family, which previously moved back so Geithner's son could finish his final year of high school there.
As for what he'll do next, the big money is on Geithner heading to the private sector, with asset management and private-equity shop BlackRock Inc. (BLK) often mentioned as a potential landing post. The chatter has been fueled by Geithner's frequent conversations with BlackRock Chairman Laurence Fink: The two spoke 49 times over the past 18 months, according to Geithner's calendar. (Fink, it's worth noting, is also mentioned as a potential successor to Geithner if Obama wins a second term.)
Less likely, say those who know Geithner, is that he'll end up at a big bank like JPMorgan Chase & Co. or Goldman Sachs Group Inc. This is in part because it would make for "bad optics" (the Obama administration spent the better part of four years chastising Wall Street for its practices while Geithner has been criticized for being too soft on bailed-out banks) and in part because it's not Geithner's style.
Despite the fact that much of the public -- not to mention some lawmakers on Capitol Hill -- assume Geithner worked on Wall Street, he never has. Instead, he has spent most of his career in public service. Before taking the Treasury post in 2009, Geithner headed the Federal Reserve Bank of New York for six years and worked at the International Monetary Fund. His main private-sector job was at Kissinger Associates Inc.
The years in public service -- particularly engaging in diplomacy with domestic and foreign partners -- left a deep impression on Geithner, infusing him with a sense of purpose that he might find lacking on Wall Street (see: "Why I Left Goldman Sachs" by Greg Smith).
Yet the years in civil servitude have also left Geithner in need of a better salary. Geithner is one of the least wealthy men to head the Treasury Department in recent years. He took more than a 50 percent pay cut to assume the job. His $199,700 salary is higher than the $174,000 earned by most members of Congress. His pay has been increased by $8,400 in three years, yet his net worth pales next to such predecessors as Hank Paulson and Bob Rubin.
With two mortgages and two college-age children, the lure of private-sector money could be hard to resist. BlackRock's Fink, for instance, received $23.8 million in salary and stock in 2011, making him No. 1 in the Finance 50, Bloomberg Markets' annual ranking of the best-paid CEOs at the largest U.S. financial companies.
Another option for Geithner -- one his own father-in-law recently blabbed about in a New York restaurant -- is to head back to his alma mater, Dartmouth College, to run the university. The departure of Jim Yong Kim to head the World Bank leaves an opening for Geithner (class of 1983), whose father, grandfather and wife are all Dartmouth grads. Kim’s compensation at Dartmouth was $612,768, including a base salary of $419,754, as of year-end 2010, according to Bloomberg News. That's not a BlackRock-sized paycheck, but it's a raise. Still, it's unlikely he'd move to New Hampshire before his son leaves for college.
Those who know Geithner say he's unlikely to rush into anything and will probably take some time -- maybe six months -- before taking a new job. Meantime, he could earn money by giving speeches and writing a book (he has publicly ruled out the book, but he could reconsider).
Still, in news he no doubt already knows, Geithner may not be going anywhere for a little while. Assuming Obama wins a second term, the administration is expected to nominate someone quickly to head Treasury, but confirmation depends on the Senate. With the debt ceiling and fiscal cliff fast approaching, Geithner may have to stick around and aid that process until the Treasury nominee gets the Senate's (sometimes slow) blessing.
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