Friday, November 20, 2009

Goldman shareholders are ticked off about bonuses

WSJ: Some of the largest shareholders in Goldman Sachs Group Inc. have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation.

The investors hold tens of millions of shares in Goldman Sachs, which is on track to make the biggest employee payout in the firm's 140-year history.

Their complaints in private conversations with the company and at analyst meetings show how anger over its big-money culture is spilling into the ranks of investors who typically shy away from debates over Wall Street pay.

The decline is caused by issuing more than 100 million shares in the past year to bolster Goldman's financial position and capital. The shareholders have said that reining in the bonus pool would deliver an upward jolt to per-share earnings and the share price, according to people familiar with the discussions.

Some major Goldman shareholders also are concerned about a little-noticed change in the company's financial statements that increased the firm's total head count by adding temporary employees and consultants. The change reduced per-employee compensation, making it look like Goldman employees earn less than they actually do.

1 comment:

Anonymous said...

Na. Shareholders as a lot are total sheep to be sheared. It has almays amazed me to see mgts self deal compensation packages and poison pills. These things really only enrich mgt and are allowed by shareholders without a peep. Thats why wall street is little more than a casino. You make short term bets because long term the only winner is the house mgt. Re doing option prices. Nobody lets the shareholders reprice the shares they have. Sucker game only.