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Goldman Sachs targeted on executive pay

2009

Shareholders at the investment bank Goldman Sachs have moved to stop the payout of large bonuses at the company, which is preparing to award executives billions of dollars.

Goldman Sachs, which received a $10billion bailout from US taxpayers this year, is expected to allocate around $23billion in bonuses after it announced profits for the third quarter in a row this month. Over the first half of the year, the firm had already set aside $11.4billion for its pool of bonuses to be paid to executives.

Institutional investors, however, have already introduced a shareholder resolution in advance of final decisions by the board of Goldman Sachs on the bonuses.

The shareowner resolution, which is expected to gather more co-sponsors leading up to the 2010 voting season, was filed by the Nathan Cummings Foundation and the Benedictine Sisters of Mount Angel.

The resolution requests that Goldman Sachs’ compensation committee ‘initiate a review of our company's executive compensation policies’.
It asks that a report be drawn up, to include comparisons of executive pay and other employees, as well an analysis of and rationale for executive compensation that in 2007 was 364 times the pay of the average US worker.

The resolution also questions the payment of large bonuses against a backdrop of sackings by the company. In November last year Goldman Sachs laid off more than 3000 employees, ten per cent of its workforce.

In 2008, a similar resolution calling for an advisory vote on executive compensation received a 46 per cent vote in favour. The company, however, is not legally required to implement shareholder recommendations, and according to the filers of the new resolution, did not do so in 2008.



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