Top Goldman Sachs Executive To Pass on Receiving 2008 Bonuses
There are going to be no Christmas presents under the tree this year for Goldman Sachs CEO Lloyd Blankfein and six other top executives at the company (just kidding).
Blankfein and the six other executives apparently came to the decision themselves, and the move was approved by the Goldman Sachs compensation committee this weekend. A spokesman for the seven executives said that the move was made because "it was the right thing to do."
The seven executives are: Lloyd Blankfein, Jon Winkelried, Gary Gohn, John Weinberg, J. Michael Evans, Michael Sherwood and CFO David Viniar.
The seven will receive no options, stock or cash bonuses in 2008 - they will only receive their annual salary, which is a fraction of what these seven executives typically take in on an average year. Last year, CEO Lloyd Blankfein took in an estimated $68.5 million dollars, of which $600k was his annual salary. The rest of his take resulted from various bonuses that Blankfein received.
Wall Street firms such as Goldman Sachs and Morgan Stanley have been coming under fire as of late, as they were receiving bailout money yet still planning on dishing out lavish bonuses to their key employees.
Those who were against these firms dishing out lucrative bonuses stressed that companies which are receiving money from the bailout fund should not be doling out millions upon millions of dollars in bonuses.
Some pointed out, however, that these firms rely on their bonus payouts in order to retain key employees, and that a freezing of bonuses in 2008 would result in an exodus of employees from these firms.
There is little to no chance of these firms freezing bonuses across the board in 2008. I would certainly not be surprised, however, to see more Wall Street executives pass on receiving their bonuses this year. I would expect other firms, such as Morgan Stanley and JP Morgan, to follow suit.
To give you an idea of how much money we are talking about - last year, Blankfein took in $68.5 million dollars, Winkelried and Cohn each made $67.5 million dollars, and David Viniar made $57.5 million dollars. Instead, they will all make $600k in base salary in 2008, and nothing more.
It will be interesting to see which firms follow suit, and how long this "bonus freeze" remains in effect for. Double bonuses in 2009? Just kidding (maybe).
Source: Reuters - Goldman CEO, 6 other forego 2008 bonuses
Filed under: General Market News | Stock Market Scandals