February 10th, 2009
11:44 AM ET

Starting public-sector jobs with parting gifts in hand

Tomoeh Murakami Tse
The Washington Post

As part of his battle against excessive pay packages, President Obama has taken aim at golden parachutes - those hefty lump sums that top executives cart away when they leave a job. But the practice is so entrenched that many of the president's own top recruits for White House positions are receiving generous severance packages from their previous employers.

While the lump sums pale in comparison to the startling amounts awarded to Wall Street executives in recent years, the payouts highlight the pervasiveness of the practice and further illustrate the growing pay disparity between ordinary citizens and the nation's elite.

Consider the new chairman of the Securities and Exchange Commission. Mary L. Schapiro reported that she is getting a lump-sum payment of $5 million to $25 million from the Financial Industry Regulatory Authority, the brokerage industry's self-regulating body she headed before joining the SEC last month. An SEC spokesman Friday said the package was worth $7.2 million.


Filed under: Economy • First 100 Days
soundoff (4 Responses)
  1. Annie Kate

    From what I read in the related article most of these payments were deferred compensation – pay for work that had already been performed but not yet received. They defer the compensation primarily for tax advantage – you don't pay tax on money earned until the money is paid. The employee benefits by being able to defer that tax and the company benefited from the work already performed. It generally is part of their package when they are hired and most of the people are going to earn far less in the government than they did in their public jobs. While the deferred payments seem outrageous how many "good" performers would the government be able to attract to its positions without the deferred compensation the employees will get from their prior jobs?

    I don't condone or condemn this – I think each case would have to be looked at individually before judging.

    February 10, 2009 at 9:37 pm |
  2. Dan

    I am now poor and live below the poverty level.
    When Bush approved a stimulas package I got a check for $500. But gas prices were going thru the roof.
    Those prices caused the food prices to rise. Now I had three choices.
    1. Spend the money on junky products that are designed not to last and to be thrown away.
    2. spend it on Gas and food so we could keep our jobs and eat.
    3. pay it on bills.

    Well I chose 2. Survival.

    Now Mr Obama is sending a stimulas check of $1000.
    What now are my stimulas choices?
    1. Spend the money on junky products that are designed not to last and to be thrown away.
    2. spend it on Gas and food so we could keep our jobs and eat.
    3. pay it on bills.
    4None of the above.

    My choice will be 4.None of the above.
    I will use it to stimulate the economic lifestyles of Lawyers.
    I will use the $1000 to retain a Bankruptcy Lawyer, and what little I have I will Loose that.
    So thank you Washington.
    For those of you who dont know.
    Your Govt knew the country was going to be broke by spring of 2009; in March of 2008 when they went into secret session.

    February 10, 2009 at 3:14 pm |
  3. amber

    Duh, so they will be treated favorably in her new job. It may have even been part of her original package that they have to pay.

    February 10, 2009 at 1:44 pm |
  4. Herbert, PA

    I don't get it – corporations pay a departing exec big $$$ for leaving? Are they so glad to get rid of them, no matter how much it may cost?

    February 10, 2009 at 1:22 pm |