Them: "But if we don't pay these guys all this money, they will leave and we'll get stuck with no talent!"

Me: "Uh, have you come down from your ivory tower? Where are they going to go if you give them a couple less MILLION?"

WTF.

The 2nd green lit link that needs a subscription to read the full article?

\i know, know one reads the articles on fark

PROXY FIIIIIIIIIIIIIIIIIIGHT!!!

That was the best 4 sentences ever.

Ever

mrmaster: WTF.

The 2nd green lit link that needs a subscription to read the full article?

\i know, know one reads the articles on fark


The problem is that subby submitted this while logged into their WSJ account. you can read the article for free, at least i did off the link on google news from earlier

the full article (new window)

wow, i failed

Did the shareholders forget that they get to vote on the board?

gittlebass: the full article (new window)

It's still asking for a subscription. Can you copy and paste?

Goldman employees deserve the bonuses. They are one of the few firms that didn't need any bailout money, but it was forced onto them by the government. They deserve to be awarded for their excellence.

Oh, and investors can whine all they want. They have the option of selling off the stock if they are displeased.

Dirty capitalist stockholders think they should be getting dividends?

Power to the Workers!!!!

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.
[GOLDMAN]

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.

One frustration: Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to its 2006 earnings, according to Thomson Financial.

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.

The figure is a lightning rod for criticism of Goldman because its staff is on pace to earn about $717,000 apiece for 2009. Excluding temporary employees and consultants would increase compensation per employee to about $775,000.

In the second quarter, Goldman Sachs began including temporary workers and consultants in its overall employee count, according to securities filings. Some shareholders and analysts estimate the company's 31,700-person work force as of Sept. 30 includes about 3,000 nonpermanent employees.

Goldman says it wasn't fiddling with the numbers when it added a footnote to its financial statements in July to reflect the change. The firm's reported compensation and benefits pool always included temporary employees and consultants, but they weren't counted in employee totals, according to the New York company.

As a result, Goldman's average of $661,490 per employee in 2007, widely cited as the high-water mark for Wall Street pay, would be smaller on a comparable basis, the company says. It won't disclose the number of temporary workers and consultants currently on Goldman's payroll.

In response to criticism that Goldman should share more of its wealth with investors, company spokesman Lucas van Praag says shareholders "have historically been more focused on the absolute return on equity and on book value per share growth" than per-share earnings.

WSJ's Evan Newmark and Ken Brown discuss why anger over Goldman Sachs's big-money culture is spilling over to investors who say it should cut down on bonuses.

Since going public in 1999, the company has generated a total return of 159%, compared with negative 2.1% for the Standard & Poor's 500-stock index, Mr. van Praag adds. Goldman shares have more than doubled this year, though they were down $4.07 a share, or 2.3%, to $172.83 in trading Thursday on the New York Stock Exchange.

The large Goldman shareholders aren't pushing for a huge downsizing of the bonus pool, agreeing with the company that it needs to reward employees for performance. But Goldman should better reward shareholders for this year's rebound, these shareholders contend.

Roger Freeman, an analyst at Barclays Capital, says he has heard from some shareholders who are concerned about how much Goldman delivers to shareholders. "It is certainly an issue, but there are other considerations," he says. "Goldman has a pay-for-performance culture, and if Goldman violates that pact with employees they run the risk of talented people leaving, which wouldn't necessarily be good for shareholders."
More

* Deal Journal: What Will Goldman Holders Do Next?
* Goldman Sachs Names 272 Managing Directors
* Readers React: 'They ripped me off'

Some investors expect Goldman to pay out a smaller percentage of its revenue in the fourth quarter than it did in previous years. "I would be surprised if they came out with a compensation pool this year that is at the level of prior years," says Tom Marsico, founder of Marsico Capital Management LLC, who often talks to Goldman about compensation and capital allocation. His Denver firm held 10.6 million Goldman shares at Sept. 30

Mr. Marsico is less concerned about per-share earnings than other large Goldman shareholders. Over the years, though, he has unsuccessfully encouraged the firm to reward shareholders in other ways, including a special one-time dividend rather than buying back shares. A one-time dividend this year, however, is unlikely because regulators are working on new capital requirements and Goldman and others would need government approval to issue one.

"We think the compensation debate is coming across as a populist issue, when to us it is really about how Goldman and other firms can best allocate capital and how pending changes in the regulatory framework may change all this," Mr. Marsico says.

Michael Mayo, an analyst at Calyon Securities, says reducing the size of Goldman's bonus pool could ease scrutiny of the firm while boosting shareholders, including Goldman employees who own between 10% and 15% of the company's shares. "Employees stand to benefit, the government benefits and shareholders benefit," he says.


Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to its 2006 earnings, according to Thomson Financial. Above, Goldman's headquarters in New York.
0723goldman
0723goldman

Goldman isn't expected to announce how much it will pay employees for 2009 until the company reports fourth-quarter results in January. Employees are likely to get less cash as a percentage of total compensation but more restricted shares that would vest in the future, in line with Wall Street's response to criticism that old pay practices encouraged risk-taking.

In October 2008, Goldman received $10 billion from the U.S. government as one of the first nine recipients of taxpayer-funded capital injections under the Troubled Asset Relief Program. Goldman repaid the money in June but continues to benefit from government help. For instance, it has the ability to borrow from the Federal Reserve. Goldman and other firms won that access after Bear Stearns Cos. collapsed and was sold to J.P. Morgan Chase & Co.

Goldman had 576.9 million average diluted shares outstanding in the third quarter, up 29% from a year earlier. As of Sept. 30, the five largest Goldman shareholders were AllianceBernstein LP; a Barclays PLC unit; a State Street Corp. unit;, Wellington Management Co.; and Vanguard Group Inc., according to LionShares, which tracks institutional ownership of publicly traded companies.

Goldman reported earnings of $8.44 billion for the first nine months of 2009, up 90% from a year earlier. Compensation and benefits jumped 46% to $16.71 billion. That was equivalent to 47% of the company's net revenue of $35.56 billion.

Semi-Sane: Goldman employees deserve the bonuses. They are one of the few firms that didn't need any bailout money, but it was forced onto them by the government. They deserve to be awarded for their excellence.

No. Goldman took about $13B as backdoor bailout as an AIG counter party. Geithner forced AIG to pay that out at full price rather than the reduced price discussed by AIG and several other banks. Goldman Sachs made a recommendation that this be done, claiming that the Treasury didn't have the authority to reduce the price.

Also, as a shareholder if you don't like what the company is doing with your money you

Oh, and investors can whine all they want. They have the option of selling off the stock if they are displeased.

I'm not even going to address the amount of stupid in that statement.

thanks for posting the full article.

Semi-Sane: Goldman employees deserve the bonuses. They are one of the few firms that didn't need any bailout money, but it was forced onto them by the government. They deserve to be awarded for their excellence.

Oh, and investors can whine all they want. They have the option of selling off the stock if they are displeased.



Not sure if serious....

hosalabad: Did the shareholders forget that they get to vote on the board?

Usually they do, but it's not necessarily entirely or significantly true -- depends on the company and how much power is associated with each share class. Not sure what GS's structure is, although I didn't spend much time looking.

Oh, and apparently GISing Hank Paulson provides a veritable treasure trove of funny faces.



Yip yip yip

Semi-Sane: They deserve to be awarded for their excellence.

The excellence of losing billions of dollars and participating in highly dubious financial transactions?

GoodyearPimp
Them: "But if we don't pay these guys all this money, they will leave and we'll get stuck with no talent!"

Me: "Uh, have you come down from your ivory tower? Where are they going to go if you give them a couple less MILLION?"

This. The financial giants' justifications for why they need to keep paying out huge bonuses when our taxpayer dollars saved their asses have been pure bullshiat from the start.

gittlebass: copy-pasta

Uh-oh, somebody's getting sued by Rupert Murdoch.

Arkanaut: gittlebass: copy-pasta

Uh-oh, somebody's getting sued by Rupert Murdoch.

good, let that asshole sue me

Semi-Sane, if you are serious, please die in a fire. Goldman needed the money. They also needed the backdoor bailout they received with the AIG bailout. If they were in such fantastic shape, why did they need $5 billion more for Warren Buffet, and $5 billion from the secondary stock offering? they should redeem the $21 billion in government-backed bonds that they sold and pay back every cent that they got from AIG before they pay their employees one red cent.

Fark the stockholders, fark Wall Street entirely. Even Al Capone thought the place was full of crooks.

Semi-Sane: Goldman employees deserve the bonuses. They are one of the few firms that didn't need any bailout money, but it was forced onto them by the government. They deserve to be awarded for their excellence.

Oh, and investors can whine all they want. They have the option of selling off the stock if they are displeased.

Um...right. You sound like USP .45. I'm hoping that's a troll post.

Goldman Sachs? A bunch of mindless jerks who'll be the first against the wall when the revolution comes.

/ Nothing's obscure on Fark

I am all in favor of offering a big a bonus as you like to your employees, and using as much leverage as you feel you can handle.

My problem is when you show up hat in hand and expect me to bail you out, and then want to set the terms.

We're all in a funk while Wall Street buys gold plated trashcans.

Burn, Wall Street, burn.

Not because you are rich, but because you think you
have a divine right to wear spurs while riding to market
on the backs of the Plain Joe taxpayers who bailed your
hubris-encrusted asses out after you deliberately
ran your companies into the ditch.

The divine right of kings was hurled with considerable
force into the dustbin of history a long time ago.

Your time is coming.

You can't cut bonuses! Those executive egos are too big to fail!

You want them to scrimp by on only 3 residences and 5 cars? You inhuman monster!

/Won't someone think of the guys who blew billions in investment money, took tax payer money, and then used it to pay themselves million dollar bonuses!