Friday 23 February 2018

Goldman's chief in line for $100m bonus

Helen Power in London

GOLDMAN Sachs, the world's richest investment bank, could be about to pay its chief executive a bonus of up to $100m (€72m) in defiance of moves by US President Barack Obama to take action against such payouts.

Bankers in Davos, Switzerland, for the World Economic Forum (WEF) said yesterday they understood that Lloyd Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank's biggest-ever payouts.

Goldman Sachs is becoming the focus of an increasingly acrimonious political and financial showdown over the payment of multi-million-dollar bonuses.

Last week, Mr Obama described bonuses paid out by some banks as "shameful".

"The American people understand that we have a big hole to dig ourselves out of, but they do not like the idea that people are digging a bigger hole, even as they are being asked to fill it up," he added.

Mr Blankfein took home his biggest bonus so far in 2007, when he was paid $67.9m (€49m). His bank's profits last year were $1.8bn higher than in 2007. This leaves the bank with a justification to pay him even more, although payouts will be made in shares rather than cash to make them more politically palatable.

Goldman declined to comment, but the bank will reveal the pay of its top five earners in a filing with America's banking regulator next month.

The bank paid back the billions of dollars it borrowed from the government early, in part because it wanted to avoid political interference. Goldman Sachs' London-based partners have agreed to limit their pay for last year to £1m (€1.15m) each in response to the government's bonus tax.

A bumper payout for Mr Blankfein would come after discussions by Goldman's rivals in Europe to limit executive pay to appease the public.

Joseph Ackermann, the chairman of Deutsche Bank, floated the idea of a remuneration cap at a private meeting of top bankers in Davos on Thursday, but failed to gain sufficient support. Last night it appeared that Deutsche had abandoned the plan and decided to pay some of its own top executives bonuses of millions of euro.

The possibility of a bonus cap was discussed at a recent meeting between UK Chancellor Alistair Darling and executives from Morgan Stanley, JPMorgan, Standard Chartered, Citigroup and Barclays Capital.

A banking source said it quickly became apparent at that meeting that a bank-led pay cap would be unenforceable because rival bankers would not stick to any agreement. (©The Times, London)

Irish Independent

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