Eric Cantor latest politician to move to Wall Street
Former House Majority Leader Eric Cantor became the latest politician to move to Wall Street, taking a high-paying job at investment bank Moelis & Co. and boosting the profile of the boutique firm founded in Century City.
Cantor, 51, who resigned last month after an upset loss in a Republican primary, will be vice chairman and managing director at the firm started in 2007 by longtime Southern California investment banker Ken Moelis.
Moelis & Co. has grown to more than 500 employees in 15 offices around the world and has been involved in some major deals. It represented the Los Angeles Dodgers and former owner Frank McCourt on the baseball team’s 2012 sale to Guggenheim Partners and advised ketchup maker H.J. Heinz Co. on its acquisition last year by Berkshire Hathaway Inc. and 3G Capital.
Ken Moelis, 55, advised leading entrepreneurs such as Donald Trump, Steve Wynn and Ron Burkle during a career that began in the 1980s in Los Angeles with now-defunct investment banking firm Drexel Burnham Lambert before striking out on his own.
In April, Moelis & Co., now based in New York, raised about $163 million in an initial public offering — the first IPO by an investment bank since the 2008 financial crisis.
In Cantor, the firm gains a well-connected former congressional leader who can offer clients “judgment, experience and knowledge about what’s going on in the world,” Moelis said in an interview Tuesday.
“At 51 years old, he was the majority leader, which gives him at a relatively young age incredible experience in the world,” said Moelis, the investment bank’s chief executive. “I think he’s a singular type of talent.”
Moelis had met Cantor several years ago and stayed in touch. Cantor recently asked him for advice on his future, and the two met for brunch, Moelis said.
“I went into that brunch with not a thought of him working for me ... and as I was talking to him about what I thought his skill set was and what I thought he could accomplish, it hit me, ‘Why doesn’t he come work here?’” Moelis said.
Cantor will do little, if any, lobbying, Moelis said.
Cantor is the latest government official to cash in on Wall Street after working in Washington. His pay will jump from the $193,400 a year he earned as majority leader to a base salary of $400,000 a year to start.
He also will receive a $400,000 cash payment and $1 million in restricted stock that will vest in phases after his third, fourth and fifth anniversaries with the company, according to a filing Tuesday with the Securities and Exchange Commission. Next year, he will receive a minimum incentive payment of $1.2 million in cash and $400,000 in restricted stock.
Elected to the House from a suburban Richmond, Va., district in 2000, the strong business advocate rose through the ranks and was elected majority leader when Republicans took control of the House after the 2010 elections.
Cantor, though, became the first congressional leader in a generation to lose his seat when he was upset in the GOP primary by Dave Brat, who had strong backing from the tea party. A local college professor, Brat criticized Cantor for working on immigration reform.
Cantor left Congress on Aug. 18, and Rep. Kevin McCarthy (R-Bakersfield) replaced him as majority leader.
Wall Street was a logical landing spot for Cantor. During his congressional career, he raised more money — $3 million — from the securities and investment industry than from any other sector, according to the Center for Responsive Politics.
“When I considered options for the next chapter of my career, I knew I wanted to join a firm with a great entrepreneurial spirit that focused on its clients,” said Cantor, a lawyer and former small business owner.
The financial industry values the knowledge of Washington officials and politicians.
Last year, former Treasury Secretary Timothy F. Geithner joined private equity firm Warburg Pincus. Former Rep. Harold Ford Jr. (D-Tenn.) went to work for Merrill Lynch & Co. and then Morgan Stanley.
Over the years, so many Goldman Sachs Group Inc. employees went to work for the Treasury Department — including former secretaries Henry Paulson and Richard Rubin — and so many left government for the Wall Street giant that the company has become known as Government Sachs.
Politicians are more likely to go into lobbying, such as former Sen. Judd Gregg (R-N.H.), who became chief executive of the Securities Industry and Financial Markets Assn. trade group in May 2013. Gregg stepped down in December.
Some politicians have gone into investment banking or venture capital. They include former Vice President Al Gore, who joined Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.
The revolving door has also swung the other way. Sen. Patrick J. Toomey (R-Pa.) is a former investment banker, and Sen. Mark R. Warner (D-Va.) is a former telecommunications venture capitalist.
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