NEW: Loeffler’s Multi-Million Dollar Corporate “Windfall” En Route to Washington Raises More Conflict of Interest Questions

Company “Changed Compensation Terms” To Give Loeffler Lucrative Golden Parachute As She Left For Senate

Loeffler Appointed to Senate Committee That Oversees Regulator of Former Business Interests, Adding to Conflicts of Interest

A New York Times report on public disclosures reveals Kelly Loeffler received a lucrative compensation package from her former employer as she left for the Senate that raises more questions on her conflicts of interest. The company — which is owned by her husband — “changed compensation terms” to allow Loeffler to walk away with a hefty golden parachute, “transforming about-to-become-worthless securities into a seven-figure windfall.”

• The report found Loeffler “received stock and other awards worth more than $9 million from the company, Intercontinental Exchange, according to a review of securities filings by The New York Times, Ms. Loeffler’s financial disclosure form and interviews with compensation and accounting experts. That was on top of her 2019 salary and bonus of about $3.5 million.” 

Once appointed to the Senate, Loeffler was then assigned a role on a committee overseeing “the overseers of the company that made her rich.” Corporate governance experts warn that a payout like Loeffler’s could create “the appearance that the company is trying to curry political favor” — and one such expert cautioned that ICE shareholders “should not view this arrangement to have been on the up-and-up.” It’s the latest in a series of ethical issues and comes as Loeffler remains embroiled in a stock trade scandal that earned a “sharp warning” from the Securities and Exchange Commission against insider trading. 

Loeffler’s scandals have become a “major political liability” and leave the unelected senator “fighting for her political life” less than six months before Election Day. She continues to lose GOP support and is regarded by elections analysts as one of the most vulnerable incumbents.

“This is more of the same shady, unethical behavior that Georgians have come to expect from Senator Loeffler and she owes them an explanation,” said DSCC spokesperson Helen Kalla. “Loeffler’s millions may have bought her a Senate appointment, but they can’t buy trust. Voters are tired of the distracting scandals that expose how their senators are not putting Georgia first, and are ready to elect leaders who will.” 

IN CASE YOU MISSED IT:

New York Times: Loeffler Got Lucrative Parting Gift From Public Company en Route to the Senate

By Nicholas Fandos and David Enrich

May 6, 2020

Key Points: 

• When Kelly Loeffler accepted an appointment to be a United States senator from Georgia, she left behind a high-paying job as a senior executive at the parent company of the New York Stock Exchange. But on her way to Washington, her old employer gave her a lucrative parting gift.

• Ms. Loeffler, who was appointed to the Senate in December and is now in a competitive race to hold her seat, appears to have received stock and other awards worth more than $9 million from the company, Intercontinental Exchange, according to a review of securities filings by The New York Times, Ms. Loeffler’s financial disclosure form and interviews with compensation and accounting experts. That was on top of her 2019 salary and bonus of about $3.5 million.

• “It looks, feels and has the sweet aroma of a pure windfall,” said Brian T. Foley, the managing director of Brian Foley & Company, an executive compensation consulting firm in White Plains, N.Y.

• The generous dispensations are not illegal or against any congressional rule, but they are certain to feed questions about how the Senate’s newest and wealthiest member has handled her finances, an issue that has emerged as a potential risk in her campaign. They add an important asterisk to Ms. Loeffler’s frequent boasts that she sacrificed huge sums of money to serve her state. They are also notable in part because she is married to Intercontinental Exchange’s chief executive, Jeffrey C. Sprecher.

• But for Ms. Loeffler, who was chosen by Georgia’s Republican governor to fill the seat vacated by Johnny Isakson after he retired because of health issues, the awards could carry more political peril. Both Representative Doug Collins, who is challenging her, and Democrats who are working to flip the seat blue have sought to weaponize Ms. Loeffler’s wealth to defeat her.

• In late January, shortly after she attended a closed-door Senate briefing on the novel coronavirus with top public health officials, she and Mr. Sprecher sold millions of dollars worth of shares in companies whose stock later lost significant value as the markets tumbled.

• When the transactions became public, some lawmakers and government ethics watchdogs said it smacked of insider trading. The Securities and Exchange Commission and the Justice Department are investigating trades by Senator Richard M. Burr, Republican of North Carolina and the Intelligence Committee chairman, who sold off 33 different stock holdings, worth a total of up to $1.7 million, after receiving coronavirus briefings. The inquiry could expand to include Ms. Loeffler and other senators, people familiar with it previously told The Times.

• Even so, the disclosures, as millions of Americans have lost jobs and savings amid the coronavirus crisis, appear to have taken a political toll on Ms. Loeffler. Internal polling commissioned by Georgia Republicans in late April and obtained by The Times found that only 20 percent of Georgia voters had a positive view of her and 47 percent disapproved.

• Corporate governance experts generally frown upon companies handing such parting gifts to senior executives because they do not serve a clear business purpose and, in cases where the executive is taking a government job, they risk creating the appearance that the company is trying to curry political favor.

• “From a corporate governance perspective, large payments to executives are appropriate only if they serve an adequate corporate purpose,” said Lucian A. Bebchuk, the director of the Program on Corporate Governance at Harvard Law School. He added that shareholders in Intercontinental Exchange “should not view this arrangement to have been on the up-and-up.”

Read the full report here.

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