For many former Republican and Democratic lawmakers, the road to retirement from Congress has been paved with gold. Scores of former lawmakers with proven expertise and easy access to their one-time colleagues on Capitol Hill are frequently in demand by special interests.
But while Washington has long been known for its revolving door that has shuttled outgoing members of Congress and senior staffers into lucrative lobbying and consulting jobs on K Street, a less noticed but equally profitable venture for many has been to secure seats on major corporate boards.
Former Speaker of the House John Boehner last month joined the board of tobacco giant Reynolds American. While the company did not disclose his compensation in making the announcement, its directors made at least $300,000 in fees and stock grants last year. Boehner, by comparison, earned a salary of $223,500 as House speaker.
Another case in point: Former GOP House Majority Leader Eric Cantor of Virginia, who lost to an obscure conservative college professor in a stunning primary upset in June 2014. Cantor quickly was hired as a vice chairman, managing director and board member at Moelis & Company, a boutique Wall Street firm. Although Cantor brought limited practical financial experience to his new posts, he raked in $2 million in 2015 for his service on the board.
According to a new Bloomberg analysis of former House and Senate members who made their way to top corporate directorships, Cantor was the highest paid board member last year among former senators or House members.
On the Democratic side, former House Majority Leader Richard Gephardt of Missouri earned about $1 million in director’s fees last year. The 14-term former House member also tops the list of overall earnings since his retirement in 2005. He has picked up a total of $10.8 million in director compensation since then, according to the Bloomberg analysis, by sitting on a number of prestigious corporate boards including those of Ford Motor Co., U.S. Steel, Centene Corporation and CenturyLink.
“I’ve learned a lot from this board experience,” Gephardt told Bloomberg. “In fact, I would wish that any member could have board experience and labor experience” before taking office.
Indeed, there are probably many sitting lawmakers who would eagerly agree with Gephardt on the value of sitting on corporate boards.
The current crop of corporate directors who once served as members of Congress is evenly split between 31 Democrats and 33 Republicans, according to the Bloomberg data. The former GOP members last year averaged $382,535 in board compensation while the Democrats averaged $330,194. That is not a bad haul for former lawmakers who earned just a fraction of that through public service. The current annual pay for senators and House members is $174,000, although members of the leadership make more.
Among other the former members who scored big pay days in 2015 as corporate directors: Tom Ridge, the first secretary of the Department of Homeland Security and a former Republican House member and governor from Pennsylvania, who earned $1.4 million. Former Republican Sen. Spencer Abraham of Michigan made $1.1 million. Former Democratic senator and governor Evan Bayh of Indiana took in $939,400. Others capitalizing on corporate directorships include former Republican senators Wyche Fowler of Georgia ($847,400), Olympia Snowe of Maine ($781,700) and Bill Frist of Tennessee ($588,700). And one-time Democratic House member Leon Panetta, who went on to become secretary of defense and director of the CIA, received $591,800.
One of the virtues of traveling that path is that outgoing lawmakers aren’t restrained by ethics rules that require former House members to wait a year before lobbying their former colleagues and force senators to wait two years before attempting to influence sitting members of Congress. According to research by Harvard and Boston University, 44 percent of senators and 11 percent of House members landed jobs in corporate boardrooms after departing Capitol Hill since 1992.
These lucrative corporate payments can sometimes be a double edged sword, though.
Bayh, for example, is paying a steep political price for having accepted corporate largesse since leaving Congress as he struggles to try to regain his Senate seat. Although he at first appeared to be a shoe-in this fall, Bayh has been relentlessly attacked by his opponent, Republican Rep. Todd Young, as a political “insider” beholden to special interests following reports that he earned $3.8 million serving on four corporate boards after leaving the Senate in 2011.
Corporate Board Compensation for 2015
Source: Data compiled by Bloomberg from company filings.
Additional work: Michael Keller