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.
The additional compensation came in the form of shares, stock options and other instruments that Ms. Loeffler had previously been granted but was poised to forfeit by leaving the company. Intercontinental Exchange altered the terms of the awards, allowing her to keep them. The largest component — which the company had previously valued at about $7.8 million — was a stake in an Intercontinental Exchange subsidiary that Ms. Loeffler had been running.
“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.
Ms. Loeffler’s allies defended the compensation package, saying there was nothing inappropriate in the arrangement.
“Kelly left millions in equity compensation behind to serve in public office to protect freedom, conservative values and economic opportunity for all Georgians,” said Stephen Lawson, a spokesman for Ms. Loeffler. “The obsession of the liberal media and career politicians with her success shows their bias against private sector opportunity in favor of big government.”
Josh King, a spokesman for Intercontinental Exchange, said the awards to Ms. Loeffler reflected what he said was her instrumental, long-term role at the company.
“We admire Kelly’s decision to serve her country in the U.S. Senate and did not want to discourage that willingness to serve,” Mr. King said in a statement.
It is not unusual for companies to dispense millions to departing executives. Exxon Mobil gave Rex W. Tillerson, its chief executive, compensation worth about $180 million when he left to become President Trump’s first secretary of state. Carlos M. Gutierrez received about $9 million from Kellogg when he left to become commerce secretary under President George W. Bush.
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.
Ms. Loeffler has said that she did not glean any nonpublic information from the Senate briefings and denied that she did anything wrong. All investment decisions, she has said, were handled by outside financial advisers without involvement by her or Mr. Sprecher. But under pressure to answer for the trades, she announced last month that she and her husband would divest from all individual stocks and move their money into mutual and exchange-traded funds.
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.
Ms. Loeffler is one of the wealthiest people ever to serve in Congress. Financial disclosure forms filed on Friday showed she has total assets of $62 million to $257 million, some of them owned jointly with Mr. Sprecher. In a statement accompanying those disclosures, she called herself a “conservative businesswoman and political outsider who left a lucrative career to serve the people of our great state.”
Ms. Loeffler joined Intercontinental Exchange in 2002 and married Mr. Sprecher two years later. She served as the company’s top communications and marketing executive until 2018, when she became the chief executive of a newly created subsidiary, Bakkt, a trading platform for cryptocurrencies and other digital assets.
Like many public companies, Intercontinental Exchange compensated its senior executives not just with salaries and bonuses, but also with stock options and shares of restricted stock, which recipients had to wait a year or more before cashing in. The purpose of such multiyear vesting periods is generally to give executives an incentive to think in the long-term and to stay at the company.
When Ms. Loeffler left Intercontinental Exchange on Dec. 20, she had millions of dollars worth of restricted stock and options that were unvested, or not yet eligible to be sold, according to securities filings. In normal circumstances, when an executive leaves a company, they forfeit their unvested compensation.
Intercontinental Exchange, however, decided to accelerate the vesting of a substantial portion of Ms. Loeffler’s stock and options, transforming about-to-become-worthless securities into a seven-figure windfall. A company official said the changes were reviewed by an outside consultant and approved by the compensation committee on Intercontinental Exchange’s board of directors.
About $1.5 million came from making some of Ms. Loeffler’s stock and options in Intercontinental Exchange eligible to be sold, according to a filing with the S.E.C. last December. But a larger amount appears to have come from an award that the company gave Ms. Loeffler soon after she became the chief executive of Bakkt.
In February 2019, Intercontinental Exchange gave Ms. Loeffler a stake in a limited liability company that owned a stake in Bakkt, according to a March 2019 securities filing. The company at the time estimated the award was worth $15.6 million. But Ms. Loeffler would be able to cash in on the award only under certain circumstances, including if Bakkt’s value soared or if it became a publicly traded company.
When Ms. Loeffler stepped down from the company less than 10 months later, she was poised to forfeit much of that Bakkt stake. But Intercontinental Exchange sped up the vesting process so that she got half of it immediately.
Because Bakkt is not a public company and has not disclosed its finances, it is difficult to determine the exact value of that award. But compensation and accounting experts said that their best estimate, based on the limited publicly available information, was that it could turn out to be worth more than $7 million, especially if Bakkt is ultimately sold or spun off into an independent company.
Mr. Foley, the compensation consultant, said the acceleration of the Bakkt award “was a really big cherry on top of an already generous sundae.”
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.”
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