Lloyd Blankfein, the chief executive of Goldman Sachs Group, saw his 2010 compensation rise to $14.1m (€9.9m) from just over $1m (€700,000) in 2009, according to an analysis of data filed with regulators.
Mr Blankfein received a salary of $600,000 (€421,000), a cash bonus of $5.4m (€3.8m) and stock awards of $7.65m (€5.4m) for the year. He also received perks worth €328,000, including €131,000 for the use of a car, €44,000 for medical and dental coverage and the rest for life insurance, tax planning and retirement contributions.
In addition, he was granted restricted stock valued at $12.6m (€8.8m), up from $9m (€6.3m) in 2009, which is not counted in the total annual package because the grants are paid out over a period of three years.
Though his salary is among the top-tier for US executives, it is a fraction of what it was just a few years ago.
Mr Blankfein was known as one of the highest paid CEOs, taking home a package worth $42.9m (€30.1m) in 2008.
However, Goldman’s reputation took a beating during the financial crisis. Considered the leading Wall Street bank, Goldman has usually outdistanced its rivals with its trading and investment banking operations. But it was sharply criticised for its high compensation levels after it accepted a 10 billion-dollar government bailout during the financial crisis in 2008.
In 2009, Mr Blankfein’s compensation dropped to $1.03m (€723,000) - his €424,000 salary, plus perks.
Goldman continued to face scrutiny in 2010 when the Securities and Exchange Commission sued the bank for creating and selling an investment that was designed to fail. The SEC accused Goldman of selling an investment created by hedge fund manager John Paulson that contained bad securities.
Goldman and Mr Paulson made money from the investment, while many of Goldman’s clients who invested in the deal lost more than $1bn (€702,000). Goldman paid €388m to settle the lawsuit.
In 2010, the bank’s net income fell 37% to $7.71bn (€5.4bn) due to sharp declines in its bond trading and investment banking businesses. Revenue slid 13% to $39.16bn (€27.5bn). The stock remained flat at about $168 (€118).
Goldman employees were paid $15.38bn (€10.8bn) in salaries and bonuses, or 39.3% of its annual revenue, for 2010. That marked a 5% drop year-over-year.
The bank said in January that its board has more than tripled Mr Blankfein’s salary to $2m (€1.4m) for 2011, and also tripled salaries to $1.85m (€1.3m) for four other top executives including chief operating officer Gary Cohn; chief financial officer David Viniar and vice chairmen Michael Evans and John Weinberg. The salaries do not include stock, options and other compensation that executives typically receive as part of their pay package.
The bank earlier this month received regulators’ permission to repay Warren Buffett’s Berkshire Hathaway for the €3.4bn investment it made at the height of the financial crisis in autumn 2008. The Federal Reserve also approved Goldman’s overall capital spending plan for 2011, including the repurchase of common stock and a possible increase in the bank’s quarterly dividend.
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year.
The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive’s stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time.
Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.