Sunday 26 March 2017

Goldman chiefs to share in $111m bonus scheme

Lloyd Blankfein, chairman and chief executive officer of Goldman Sachs. Photo: Bloomberg News
Lloyd Blankfein, chairman and chief executive officer of Goldman Sachs. Photo: Bloomberg News

Michael Moore and Christine Harper

Goldman Sachs CEO Lloyd Blankfein (right) and his top deputies will collect about $111.3m in stock next month in a delayed payoff from last year and their record-setting 2007 bonuses.

Mr Blankfein (56) is poised to receive about $24.3m in January, based on yesterday's share price, while its president, Gary Cohn (50), will get about $24m, company filings show.

The payouts, just a portion of the $67.9m bonus awarded to Mr Blankfein for 2007 and the $66.9m paid to Mr Cohn, reflect a 24pc decline in the stock's value since it was granted at $218.86.

Within a year after the bonuses were approved, Goldman Sachs took $10bn from the US treasury, converted to a bank, then was borrowing as much as $35.4bn a day from Federal Reserve emergency programs.

"Clearly we now look back and say, 'Were things fine? Should they have paid?' Maybe not," said Jeanne Branthover, a managing director at recruitment firm Boyden Global Executive Search in New York.

"There's nothing you can do about it. The payouts were in stone. But hopefully, in the future, they won't be."

Since the 2008 credit crisis wiped out competitors such as Lehman Brothers and led to unprecedented US government assistance to financial institutions, regulators have encouraged banks to pay senior employees with deferred stock and claw-back payouts if trading strategies backfire.

Mr Blankfein and Mr Cohn, who received cash awards of $27m and $26.6m respectively for 2007, didn't get any bonuses for 2008 and received only restricted stock for 2009.

The New York-based firm announced on December 10, 2009, that all 30 members of its management would receive only restricted stock for their year-end bonuses.

Through the first nine months of 2010, Goldman Sachs set aside $13.1bn to cover compensation and benefits expenses, or enough to pay each of its 35,400 employees $370,706 apiece. That's down from an average $527,192 per employee a year earlier.

The payments come as bonuses across Wall Street are expected to decline. Compensation for trading and investment banking employees is likely to be down 22pc to 28pc from last year, according to Options Group, an executive search and compensation firm in New York.

Morgan Stanley has told some employees to expect investment-banking bonuses to decline 10pc to 30pc, two people briefed on the matter said earlier this month.

Irish Independent

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