Money for nothing at Goldman
Posted by Colin Barr
January 30, 2011 8:25 am
America’s favorite bankers have outdone themselves yet again.
How might you compensate management for a year in which profits plunged, you spent $550 million of shareholder money to settle a fraud investigation and your stock ended up more or less exactly where it started (see chart, right)?
Pay? Sure. Performance? Not so much
You might be tempted to nix raises or withhold bonuses to send a responsible message about linking pay to performance. But if so, you wouldn’t be Goldman Sachs (GS).
It just had the year described above – and responded by tripling everyone’s base salary while boosting bonuses by 40%. Is this a great country or what?
Goldman said in a filing Friday afternoon that CEO Lloyd Blankfein will make $2 million this year, and his top lieutenants will each make $1.85 million. Top Goldman brass had been making $600,000 annually in salary since the firm’s 1999 initial public offering.
All 470 of Goldman’s partners will get higher salaries. The top five officers will also get $12.6 million each in bonuses, paid in restricted shares that can’t be sold for five years. That’s up from $9 million each last year.