To Help Close NY State Deficit
Goldman Sachs Will Furlough Top Executives
To Help Close NY State Deficit
New York, May 21, 2010 - The Goldman Sachs Group, Inc. (NYSE: GS) today announced that as of May 26, 2010, the firm's highest-paid executives will be furloughed one day per week. The money saved will be donated to the State of New York, to help close the state's budget deficit.
“Our company must set an example for the financial industry as a whole, and this is just a start,” said Andrew Mammon, Director of Media Relations for The Goldman Sachs Group, Inc. “Last year profits on Wall Street hit a record high of $61 billion – nearly three times the previous record. If we donate 20% of that to New York State, it would cover the state’s entire $9 billion deficit. In fact, it would provide $3 billion more – a 'bonus' to fund improved education, transit and health care for all New York.”
Goldman Sachs announced the new executive furlough program in response to the rapid recovery of financial industry profits, made possible by billions of dollars in taxpayer-financed loans. “Financial industry firms are posting record-setting profits, while the rest of the country remains stuck in a deep recession,” said Mammon. “It's time for Wall Street to reimburse Main Street. It will strengthen our economy at the base, and it's the right thing to do.”
Goldman Sachs economists have concluded that cuts in state spending are harming the economic recovery. In the first quarter of 2010, reductions in state and local government spending subtracted half a percentage point from the increase in GDP. The company's “give-back” initiative will help avoid more damage.
In a conference call with analysts and investors, Mammon expressed concern about new proposals for New York State to enact a “bonus recapture tax,” close corporate tax loopholes, and retain a portion of the stock transfer tax that is currently rebated at 100%. “If we voluntarily donate billions of dollars in the public interest, that will make it clear that such proposals are unnecessary,” said Mammon. “That's why it is important that other firms join us in this effort.”
Failure to act voluntarily will increase likelihood of mandatory measures, he warned: “Last year the top 25 hedge fund managers were paid an average of more than $1 billion apiece. The cash portion of Wall Street bonuses for 2009 is a near-record $20.3 billion. When people read headlines like that, it makes them a little crazy to hear that their homebound grandma's meals-on-wheels program has been cut off.”
Mammon dismissed Gov. Paterson's proposed furlough for state employees as “a gimmick” that does not address financial reality. “That's not where the money is,” he said. “The largest state worker union is CSEA -- and their members' average salary is less than $40,000.” State workers earn an average of 11% less than comparable employees in the private sector, according to a recent study by the National Institute on Retirement Security.
The governor's worker-furlough proposal would save at most $250 million, noted Mammon, while the state deficit stands at $9 billion. “In contrast, our financial executive furlough program would provide a real solution to the state's fiscal problems – problems that began right here on Wall Street.”
“When we help New York preserve kindergarten and public colleges, community health centers and environmental protection, we will truly be doing God's work,” said Mammon.
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The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
Investor Contact:
Andrew Mammon
Tel: 212-681-4640
Media Contact:
Lucas Vandamm
Tel: 212-681-4640
2 comments:
Almost got me. That was clever.
Worth clicking on the links at top & bottom of page (e.g., "Site Map").
Calling the contact phone # is interesting, too.
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