How Big of a Bonus Will the CEO of Goldman Sachs End Up Receiving?
Earlier this week, the Times Online published an article titled "Goldman Sachs and the $100 Million Question" which generated a great deal of buzz throughout the financial world.
The article claimed that, according to bankers in Davos for the World Economic Forum, "Mr Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank's biggest-ever payouts, in defiance of President Obama's attempt to shame banks into cutting bonuses".
The article went on to say that "some rival bankers claim Mr. Blankfein could receive up to $100 million".
A spokesman for Goldman Sachs immediately lashed out at the report, calling it "speculative nonsense", but also acknowledged that "Goldman's board had yet to make a final decision on executive compensation".
Some independent observers believe that Blankfein will end up taking home a bonus of somewhere in the neighborhood of $40-$50 million for 2009.
Blankfein took home a bonus of $67.9 million in 2007.
In 2008, due to the financial crisis, Blankfein didn't receive a bonus.
Goldman Sachs has made more profit in 2009 than in 2007, which was the year that Mr. Blankfein received his near $70 million bonus.
Goldman Sachs' wildly profitable year, coupled with the fact that Blankfein didn't receive a bonus in 2008, brings a $100 million bonus into the realm of possibility, at the very least. However, I don't think that this will happen.
I'd bet on a bonus in the $35-$50 million range for Blankfein. I definitely don't see Goldman Sachs paying out a $100 million dollar to their CEO (at least this year), and I definitely don't see them exceeding the amount of his 2007 bonus.
Whether it's $30 million or $50 million or $100 million, there will still be plenty of outrage from the public.
We should find out the amount of Mr. Blankfein's bonus soon.
Source: The Times Online - Goldman Sachs and the $100 Million Question
Filed under: General Market News