Stock Award for DOT Sec. Chao Draws Spotlight
A published report has raised questions about Vulcan Materials Co. deferred stock units that U.S. Secretary of Transportation Elaine Chao received for her earlier stint as a board member of the company. DOT’s ethics officials found “no conflict of interest” on Chao’s part, a DOT spokesperson said. Vulcan is the largest U.S. aggregates company, reporting that about 23% of its 2018 aggregates sales by volume went to highway construction. Chao joined Vulcan’s board in 2015 and resigned Jan. 31, 2017, when the Senate confirmed her as DOT secretary. In a 2017 federal ethics filing, Chao said she would get a “cash payout” from Vulcan in April 2018 for her stock units. The company said that in accordance with its director compensation plan, Chao’s deferred stock awards were paid out at that time. DOT notes that the awards were in stock, not cash, and said departmental ethics officials are working to clarify the term “cash payout” to reflect what Vulcan did. In her 2017 ethics filing, Chao didn’t pledge to divest the stock. The DOT spokesperson said Chao disqualified herself from any DOT action that would have “a direct and predictable impact” on Vulcan. The Wall Street Journal spotlighted the matter in a May 28 story. DOT distributes most federal-aid highway funds to states, which award construction contracts.