A new study has found that banks, including JPMorgan Chase, Goldman Sachs and Morgan Stanley, all have provisions that allow acceleration of payments owed to senior executives if they take government jobs, the New York Times DealBook blog reported today. Such a benefit was highlighted recently during the confirmation hearing for Jacob J. Lew as Treasury secretary. His previous employer, Citigroup, had guaranteed him preferential financial treatment if he were to leave to take a job in the government. "These companies seem to be giving a special deal to executives who become government officials," says the study, to be released today by the Project on Government Oversight. Current oversight rules allow such payments. In 1990, the Supreme Court ruled that Boeing was within its rights to make lump sum severance payments to several employees when they quit Boeing to take senior military posts. The Project on Government Oversight says that the rules governing executive sales of stock were tightened in 2004, as a response to the collapse of the energy company Enron. In the weeks before filing for bankruptcy, Enron had paid out millions of dollars in accelerated payments to senior executives. Now it is much harder for companies to speed up stock payments, but there is a government service exemption that allows for some leeway.
