Published in The Wall Street Journal December 10, 2009 by Susanne Craig
Goldman Sachs Group Inc., moving to defuse public outrage over its pay, said its top 30 executives will receive no cash bonuses for 2009 despite the firm’s expected record profits.
Thursday’s announcement was the biggest concession yet by Goldman in response to the criticism of its compensation barely a year after the New York company received $10 billion in taxpayer-funded aid. Instead of a mix of cash and stock, Chairman and Chief Executive Lloyd C. Blankfein and the rest of Goldman’s management committee will be awarded only stock that can’t be sold for five years.
But the changes are only for 2009 and don’t necessarily affect more than 31,000 other Goldman employees, consultants and temporary workers. That group includes traders and other employees who are fueling most of this year’s revenue and profit surge, putting them in line for sharply higher bonuses early next year. In addition, Goldman gave no indication in its announcement that it will buckle to pressure to rein in overall pay levels.
Archive for December 10th, 2009
Goldman Blinks on Bonuses
Firms Face New Curbs on Pay
Published in The Wall Street Journal December 10, 2009 by Deborah Solomon, Sara Schaefer, and Alistar MacDonald
Authorities on both sides of the Atlantic are moving to enact tough curbs on pay, in an indication that governments are taking increasingly aggressive steps to rein in compensation after the financial crisis.
In the U.S., the Treasury Department’s pay czar, Kenneth Feinberg, is poised to enact tougher-than-expected rules for employees at companies that received large amounts of government assistance. The U.K. on Wednesday slapped banks with a 50% tax on portions of bonuses they pay to individuals, in perhaps the most aggressive move yet by a government.
Mr. Feinberg has already capped salaries of top employees under his review. Now, according to government and company officials, he’s going after the next tier and is expected to impose $500,000 salary caps on hundreds of employees at the companies.
Goldman Bows to Pressure Over Pay
Published in The Wall Street Journal, December 10, 2009
Goldman Sachs Group Inc. on Thursday said its top 30 executives won’t receive a cash bonus for 2009 as the Wall Street bank bows to public pressure about runaway compensation packages.
The move approved by Goldman’s board is an attempt to quell public criticism about multimillion-dollar bonus packages expected to be doled out this year. The firm’s 31,000 employees are on track to earn an average of more than $700,000 apiece this year, the most in its 136-year history.
Investors will also get a say on pay: Goldman said shareholders will get an advisory vote on the company’s compensation policies. The firm has been in private discussions with major investors during the past several weeks in an effort to ward off backlash over its record compensation pool.