Lazard’s Weiss Due $21.2 Million to Leave for TreasuryJeanna Smialek
Antonio Weiss stands to make about one-fiftieth of his Lazard Ltd. compensation if confirmed as a top Treasury official. Walking away with as much as $21.2 million may soften the blow.
President Barack Obama’s nominee for Treasury undersecretary for domestic finance will leave a job that paid him $15.4 million in the past 23 months for government work that pays $167,000 annually. Under the terms of his departure, the bank agreed to grant him unvested income ahead of schedule: about $16.2 million in stock and as much as $5 million in deferred pay if confirmed for the job.
When executives jump from the corporate world to high government posts, they sometimes are allowed to redeem unvested compensation ahead of schedule. That keeps employees from losing the money, and makes heading to Washington less financially punishing. The practice is under scrutiny from the AFL-CIO, the nation’s largest labor organization, as a move that harms shareholders.
“There are a lot of reasons why the company wouldn’t be opposed,” to accelerating vesting, said David Schmidt, senior consultant with a specialization in executive compensation at Arthur J. Gallagher & Co. They may want to stay in their former employee’s good graces for policy influence, and “if he does come back after his term in government, he’s coming back with a pretty interesting resume that could be helpful to the company.”
If Weiss goes to the Treasury, Lazard will accelerate vesting on two batches of restricted stock -- one of about 66,000 shares and another with about 251,000 shares, according to a financial disclosure form filed this week.
The deferred compensation he’s owed is listed as an asset worth between $1 million and $5 million on his disclosure form.
Weiss, 48, has been Lazard’s global head of investment banking since 2009.
According to his “retirement agreement,” the bank will accelerate all of his unvested restricted stock and unvested restricted stock units upon his resignation, an ethics letter filed with the disclosure stated, or he will “forfeit these interests.”
A Lazard spokeswoman declined to comment on Weiss’s behalf, and declined to provide detailed responses to questions about the ‘Deemed Retirement Agreement’ mentioned in the disclosure.
AFL-CIO’s president Richard Trumka on Nov. 20 sent letters to seven banks, including Lazard, asking for “a detailed explanation” on practices including accelerated vesting.
“I question how providing accelerated vesting to senior executives who resign for government service benefits Lazard or its investors,” Trumka wrote.
Trumka’s letter says that Lazard’s compensation could provide a “‘golden parachute’ for entering government service.”
Lazard is not the only bank to maintain the practice, nor is Weiss the first official to potentially benefit. U.S. Treasury Secretary Jacob J. Lew was asked at his Senate confirmation hearing about such a clause in his contract with Citigroup Inc., where he worked as investment banker before returning to government employment, according to a hearing documents.
The AFL-CIO has also sent letters to Citigroup, Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. questioning the practice.
The labor group was looking at the revolving door between Wall Street and Washington and didn’t examine whether other types of corporations used similar provisions, said Heather Slavkin Corzo, director of the AFL-CIO Office of Investment.
“This is just the type of issue that we were worried about,” she said of Weiss’s disclosure. “It was a coincidence that our letters happened to go out on the same day that his information went up.”
Weiss’ disclosure filing shows his assets, which are listed in ranges, are valued at $54 million to $203 million.
The more than 40-page document notes that he has a $500,000 to $1 million investment in DR Beachfront Real Estate LLC, an entity that owns residential real estate in the Dominican Republic, and a $50,000 to $100,000 investment in Last Gentleman LLC, an entity created to finance a documentary film.
The entity funded Plimpton!, according to a website for the film, a documentary about the famous writer George Plimpton, a founder of the Paris Review, whom Weiss worked with after college. Weiss is the publisher of the literary magazine.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.