Thanks to a generous retirement package from the private equity firm that he helped to build, Mitt Romney and his family continue to earn millions of dollars a year in profit from a company he left 13 years ago. While not usual for someone in Romney's business, because of the nature of private equity and its tax rules, that income may also be taxed at the much lower capital gains rate.

According to a report that appears on the front page of The New York Times, when Romney left Bain Capital in 1999 to help run the Salt Lake City Olympics, he negotiated a severance package that entitled him to a portion of the firm's future profits, including profits from equity funds that had not yet been created. He essentially remained a partner on every Bain deal created through February 2009, even as he served as governor of Massachusetts and beyond. Though his stake in the deals has decreased over time, since Romney left the company, Bain's assets have ballooned, from about $4 billion in 1999 to over $21 billion in 2005. As a result, his family makes somewhere between $5 million to $13 million in year in income from Bain deals, many of which he had no part in. (The exact figures are unknown, because financial disclosure rules do not require precise details of investments.)

The deal was not usual for someone in Romney's position. Because Romney was one of the original founding partners of Bain Capital, he was essentially being rewarded the way the founder of any successful startup might be when they make their exit. Bain is not a public company, so he couldn't simply cash out via IPO or a massive stock sale, and deals like this one are the payoff for launching a successful company.

A key difference for Romney, however, is that he invested little of his own money at the founding — Bain Capital was a spin-off of Bain & Company, which put up most of the money for its first fund — and he still enjoys the capital gains tax rates reserved for hedge fund and private equity managers, without having an active role in the company. He's being rewarding by a system that prizes risks, despite taking fewer of them than some others might have. A professor quoted in the store explains it best:

“The rationale for having a capital gains preference is to encourage investors to put their cash into investments,” said Mr. Fleischer, the University of Colorado law professor. “Romney here isn’t even putting in any labor.”

In any event, no matter what you think of the nature of his business or the way Bain capital makes its money, the Times report does shed an interesting light on just how rich Mitt Romney really is. He is among the wealthiest Americans to ever make a serious run at the presidency, with a net worth estimated to be over $200 million. The exact numbers are not know, partially because of the complexity of his arrangements with Bain and also because much of that wealth is held in blind trusts set aside for his family. Despite not being in the private equity game for over a decade, he continues to earn money like he is, amassing a vast private fortune even as he expanded his public profile.

The story also suggest that even as he left the private sector, Romney was already concerned about the political ramifications of his decisions. While Romney's deal is quite generous, he could have made even more money had the company gone public or had he not been concerned about the political calculations of demanding a larger stake at retirement. But that might not have looked good for someone who would run for public office for the first time just three years later.