Allen & Overy partner pay in the spotlight as US bank regulatory head leaves for top treasury post

Allen & Overy (A&O) partner Heath Tarbert, who led the firm’s US bank regulatory team in Washington DC, is leaving the firm to take up a top post at the US Treasury Department.

The Trump administration announced this April that it intended to nominate Tarbert for assistant secretary overseeing international markets and development, and this Wednesday (27 September), the US Senate voted 87-8 to confirm his appointment.

Tarbert is leaving A&O after a strong 2016-17 for the magic circle firm, which this July posted a 26% increase in profit per equity partner to £1.51m, while revenue rose 16% to £1.52bn.

Tarbert’s financial disclosure said his partner compensation was £860,000, which he converted to US dollars.

Tarbert said he expects to receive a refund of his A&O capital account – he placed the value at between $250,000 and $500,000 – calculated as of the date of his withdrawal and under the partnership agreement. Tarbert also said he anticipated receiving between $500,000 and $1m in his final partnership share.

Tarbert’s financial disclosure shows he provided legal services last year to major financial institutions including JPMorgan, Goldman Sachs, Bank of America, Citigroup, HSBC, RBS and Morgan Stanley.

The disclosure also reveals that Tarbert provided legal services to Christopher Giancarlo, who was then a member of the US Commodity Futures Trading Commission. Giancarlo was confirmed in August as chairman of the agency. Tarbert’s disclosure did not reveal what work he did for Giancarlo.

“We are proud that one of our partners has been asked to assume such an important international position at the Treasury Department,” said Barbara Stettner, managing partner of A&O’s Washington DC office, said in a statement. “We encourage public service in our firm and have had numerous colleagues take on key positions in government over the years.”

At the US Treasury, Tarbert will be responsible for operating the unit that reviews investment by foreign companies in the US for national security risks, the Committee on Foreign Investment in the United States, and for representing the US at the Financial Stability Board and G20 working groups on regulatory policies and coordination. He will also be responsible for developing positions at the World Bank and other multilateral development banks.

In his ethics agreement with the Treasury Department, Tarbert said he would withdraw from the partnership of A&O upon his confirmation. He also said he would he would resign from positions with Harvard Law School, the Bloomberg BNA Banking Report, the Review of Banking & Financial Services, the Review of Securities & Commodities Regulation and The Banking Law Journal, and not participate in any matter involving them for a year after his resignation unless he was first authorised to participate.

Until he receives all the amounts due, Tarbert said he would not participate in any matter that “that to my knowledge has a direct and predictable effect on the willingness of the firm to pay amounts owed me until I first receive a written waiver”, or participate in any matters in which the firm is a part “unless I am first authorised to participate”.

Tarbert said he is also owed a $5,849 refund of his partner capital account with his former firm, Weil Gotshal & Manges, and also would not participate in any matter concerning that firm unless he obtained a written waiver first.

Chris Johnson contributed to this report.