Baldwin to SEC: “We should be cracking down on these government service golden parachutes.”

In October, the SEC published a new staff bulletin that limits the ability of shareholders to vote on a company’s government service golden parachutes and effectively clears the way for companies to give bonuses to their executives who leave to take high-profile positions in government.

This week, I called on Chairman Clayton to rescind this bulletin.

As Politico reported:

When Wall Street insiders and corporate executives move through the revolving door from the private sector to public service, they should not be rewarded with golden parachutes simply for joining the federal government.

The latest move from the SEC will impede shareholders’ ability to stop these big compensation packages and increase the risk of conflicts of interest for former executives working in the federal government.

“We should be cracking down on these government service golden parachutes, but this staff bulletin would make it easier for public companies to expand their use, and I ask you to rescind it,” Baldwin said in her letter. “It provides public companies a mechanism to stifle shareholder efforts to curb the risks of conflicts of interest by prohibiting government service golden parachute payments at companies in which they are invested.”

Last year, I introduced the Financial Services Conflict of Interest Act to slow the revolving door between Wall Street and Washington, prohibit “golden parachute” bonus payouts and combat conflicts of interest.

My legislation would prohibit government employees from accepting bonuses from their former private sector employers for entering government service. It would also increase the prohibition on lobbying the federal government from one to two years, and require senior financial service regulators to recuse themselves from any official actions that directly or substantially benefit the former employers or clients for whom they worked in the previous two years before joining federal service.

The people of Wisconsin cannot afford to have insiders in the pocket of powerful special interests writing the rules and making a rigged system in Washington worse.