Goldman Sachs bosses to get €84m in bonus stock

GOLDMAN Sachs Group’s top executives will get about $111.3 million (€84.3m) in stock next month in a delayed payout from last year and their record-setting 2007 awards, even as Wall Street prepares for lower bonuses.

Chief executive Lloyd C Blankfein, 56, is to receive about $24.3m in January, based on the closing share price on December 14, while president Gary D Cohn, 50, will get $24m, company filings show.

The payouts, just a portion of the $67.9m bonus awarded to Blankfein for 2007 and the $66.9m paid to Cohn, reflect a 24% fall in the stock’s value since it was granted at $218.86.

Within a year after the bonuses were approved, Goldman Sachs took $10 billion of US bailout funds, converted to a bank and was borrowing as much as $35.4bn a day from Federal Reserve emergency programmes. This year the New York-based firm paid $550m to settle US regulators’ fraud charges related to a mortgage security the company sold in 2007.

“Clearly we now look back and say, ‘Were things fine? Should they have paid? Maybe not,’” said Jeanne Branthover, a managing director at recruitment firm Boyden Global Executive Search in New York. “There’s nothing you can do about it. The payouts were in stone. But hopefully, in the future, they won’t be.”

Since the 2008 credit crisis wiped out competitors such as Lehman Brothers and led to unprecedented government assistance to financial institutions, regulators have encouraged banks to pay senior employees with deferred stock and recoup payouts if trading strategies backfire.

Blankfein and Cohn didn’t get any bonuses for 2008 and received only restricted stock for 2009.

Goldman Sachs announced on December 10, 2009, that all 30 members of its management committee would receive only restricted stock for their year-end bonuses. The company hasn’t made a similar announcement this year.

Through the first nine months of 2010, Goldman Sachs set aside $13.1bn to cover compensation and benefits expenses, or enough to pay each of its 35,400 employees $370,706. A year earlier, the average was $527,192 per employee.

Meanwhile, across Wall Street compensation for trading and investment- banking employees is likely to be down 22% to 28% from last year, according to Options Group, an executive search and compensation consultant firm in New York.

Morgan Stanley has told some employees to expect investment-banking bonuses to decline 10% to 30%.

Among the scheduled January payouts are $21.3m to chief financial officer David Viniar; $20.8m to former co-president Jon Winkelried, who left the firm in March 2009; and $14.3m to Edward C Forst, co-head of investment management, who left in 2008 and returned to Goldman Sachs a year later.

The amounts are based on the December 14 closing share price of $167.33, which is likely to change by the time the stock is delivered next month.