AFL-CIO questions Wall Street's 'revolving door' compensation practices

The AFL-CIO is questioning whether major financial institutions incentivize top executives to leave for government work with hefty bonuses.

The labor union sent letters to seven major institutions Thursday, calling on them to explain compensation practices that seemingly encourage a “revolving door” between the public and private sector. The union argued that banks are actually reaping benefits when top talent leaves for the government.


“How is it in the interest of shareholders to allow for accelerated vesting or other incentives in exchange for leaving the company?” asked Heather Slavkin Corzo, director of the union’s office of investment. “Unless the position of these companies is that this is just a backdoor way to pay off a newly minted government official to act in Wall Street's private interests rather than the public interest.”

The letters were sent to Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan, Bank of America, Wells Fargo and Lazard.

The letters come as some of the left gears up to question the place of high-ranking financial executives in high-ranking spots in the federal government.

Sens. Elizabeth WarrenElizabeth WarrenPoll: 73 percent of Democratic voters would consider voting for Biden in the 2024 primary Overnight Defense: US launches another airstrike in Somalia | Amendment to expand Pentagon recusal period added to NDAA | No. 2 State Dept. official to lead nuclear talks with Russia Warren-backed amendment to expand Pentagon recusal period added to defense bill MORE (D-Mass.) and Dick DurbinDick DurbinNew York gun rights case before Supreme Court with massive consequences  Schumer leaves door open for second vote on bipartisan infrastructure deal Bipartisan group says it's still on track after setback on Senate floor MORE (D-Ill.) have come out in opposition to President Obama’s recent nomination of Antonio Weiss to take a top domestic finance spot at the Treasury Department. Weiss, the global head of investment banking at Lazard, was a key adviser in several corporate "inversions," in which a U.S. company acquires a foreign competitor to take advantage of a lower international tax rate.

Congressional Democrats and the White House have been critical of such transactions, and the Treasury Department pushed through rules in September to make the transactions less beneficial.

Warren wrote in an editorial in The Huffington Post that Wall Street is “dominating” the makeup of the president’s team, and she called on more nominees with financial experience who haven’t received paychecks from giant financial institutions.