No cash bonuses for Goldman Sachs` top 30 executives
Amid the growing uproar over exorbitant executive salary, financial services firm Goldman Sachs has said its top 30 executives will receive their annual bonuses only in stocks rather than cash this year.
New York: Amid the growing uproar over
exorbitant executive salary, financial services firm Goldman
Sachs has said its top 30 executives will receive their annual
bonuses only in stocks rather than cash this year.
The company`s 30-person management committee, including
Chairman and Chief Executive Officer Lloyd Blankfein, Chief
Financial Officer David Viniar and leaders of the firm`s
global and regional divisions, would get bonuses in stocks,
which cannot be sold for five years.
"The firm`s entire 30-person management committee, which
comprises all global divisional and regional leadership, will
receive 100 per cent of their discretionary compensation in
the form of Shares at Risk, which are subject to restrictions
for five years," Goldman Sachs said in a statement.
According to reports, earlier top executives of Goldman
received their bonuses in the ratio of 70 per cent stocks and
30 per cent cash, with the bonuses vesting over four years.
The moves comes amid a public furore worldwide over huge
bonuses and incentives paid to bankers, which is widely
believed to one of the causes for the global financial crisis.
Earlier this week, the UK government proposed a temporary
50 per cent tax on bonus payout for the bankers. The
government added that it attached great importance to tackling
remuneration practices that contributed to excessive risk-
taking by the banking industry.
Further, Goldman Sachs said shares can be taken back in
cases employees are engaged in materially improper risk
analysis or fail to raise concerns about risks.
The board of directors have approved changes in the
compensation policy for 2009, and shareholders would have an
advisory vote in the compensation of its named executive
officers at the firm`s annual meeting of shareholders in 2010.
The move of share recapturing would ensure that "our
employees are accountable for the future impact of their
decisions, to reinforce importance of risk controls to the
firm and to make clear that our compensation practices do not
reward taking excessive risk," the statement added.
"The measures that we are announcing today reflect the
compensation principles that we articulated at our
shareholders` meeting in May," Goldman Sachs Group Chairman
and CEO Lloyd C Blankfein said.
We believe our compensation policies are the strongest in
our industry and ensure that compensation accurately reflects
the firm`s performance and incentivizes behavior that is in
the public`s and our shareholders` best interests," Blankfein
"In addition, by subjecting our compensation principles
and executive compensation to a shareholder advisory vote, we
are further strengthening our dialogue with shareholders on
the important issue of compensation," Blankfein added.