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Is The Goldman Exodus About To Start? Firm Announces Management Committee To Get 5 Year Vesting "Shares At Risk" With Clawbacks
NEW YORK - (Business Wire) The Goldman Sachs
Group, Inc. (NYSE: GS) today announced that its Board of Directors has
approved changes to compensation for 2009. They include the following:
- The
firm’s entire 30-person management committee, which comprises all
global divisional and regional leadership, will receive 100 percent of
their discretionary compensation in the form of Shares at Risk, which
are subject to restrictions for five years. Discretionary compensation
represents the vast majority of senior management's compensation and is
directly tied to the firm's overall performance. - Shares at Risk cannot be sold for five years, in addition to other restrictions.
- The
five-year holding period on Shares at Risk includes an enhanced
recapture provision that will permit the firm to recapture the shares
in cases where the employee engaged in materially improper risk
analysis or failed sufficiently to raise concerns about risks.
Enhancing our recapture provision is intended to ensure that our
employees are accountable for the future impact of their decisions, to
reinforce the importance of risk controls to the firm and to make clear
that our compensation practices do not reward taking excessive risk. - The
enhanced recapture rights build off an existing clawback mechanism
which goes well beyond employee acts of fraud or malfeasance and
includes any conduct that is detrimental to the firm, including conduct
resulting in a material restatement of the financial statements or
material financial harm to the firm or one of its business units. - Shareholders
will have an advisory vote on the firm’s compensation principles and
the compensation of its named executive officers at the firm’s Annual
Meeting of Shareholders in 2010.
“The measures that we are announcing today reflect the compensation
principles that we articulated at our shareholders' meeting in May. We
believe our compensation policies are the strongest in our industry and
ensure that compensation accurately reflects the firm's performance and
incentivizes behavior that is in the public’s and our shareholders’
best interests,” said Lloyd C. Blankfein, Chairman and Chief Executive
Officer of the The Goldman Sachs Group, Inc. “In addition, by
subjecting our compensation principles and executive compensation to a
shareholder advisory vote, we are further strengthening our dialogue
with shareholders on the important issue of compensation.”
The Board of Directors and management believe these changes are
consistent with the firm’s compensation principles, which were
presented at last year’s Annual Meeting. Going forward, we continue to
be focused on refining and improving our compensation practices. The
principles underlying effective compensation practices include linking
compensation to multi-year performance, aligning compensation with the
long-term interests of the firm and its shareholders, and ensuring that
compensation incentives are formulated so that they serve as a tool to
attract, retain and motivate talent, without encouraging excessive
risk-taking.
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Don't get caught or you will face .... THE CLAW.
With a very nicely worded "zip lock" clause in the restriction agreement no doubt.
This is all fine and good, but it still misses the point. The issue really shouldn't be about how the bonus pool is distributed; the issue is where did the money in the bonus pool come from?
This year's pool includes the AIG counterparty bailout payment as well as $s earned by GS by taking advantage of gov't programs (while risking tax-payer dollars). And until someone can show that GS is not breaking the law with their 98% winning percentage on the trading desk, that portion of the bonus pool is questionable at best. Strip out the first 2 items, and the bonus pool is virtually nothing...and no one would be complaining about GS bonuses anymore.
Or better yet, they should be put in jail where their bonuses would be ass fuckings. Oops, shame on me, I'm playa hatin' GS bashing again. I do apologize.
Guilty until proven innocent. Nice.
Oh due process of course....It would be about as difficult as proving that my ass has a hole in it. Just pinch your nose and look in the right place.
In the meantime, such employees may take an interest free loan from Goldman Sachs up to the then FMV of the restricted shares, with such shares serving as colateral for the loan.
Brilliant strategy......cause who know who goin' to jail in 5 years ??
Straight out of the WorldCom playbook.
It's not enough but I think they're getting the point that public shouts at employees outside their doors is not a good trend of things to come. Their PR should be axed immediately. They have given terrible advice for a complicated yet contentious issue.
It's a start. They've clearly had the fear put in them a bit. This is only the top 30 executives so that must leave thousands recieving bonuses the old fashion way.
I think the bigger issues are:
Does the amount of value added by the financial industry really deserve these outsized profits in the first place?
Is the market rigged, and what does this mean for mom and pop trying to save up for retirement?
Do the market riggers own Congress?
These issues are all quite a bit bigger than how they put window dressing on their ridiculous bonuses.
Mom and Pop will, like me, be working until they die. And if we lose our jobs.....you got it, we die.
Kind of gives new meaning to the phrase: "Work to live."
TD, totally off topic, but I got this in a report today from JPM:
"Non-agencies retraced slightl
y in November, backing off from the peaks of the rally. We have been recommending buying on the dips, but we caution that the announcement of ABX.Prime is likely to put pressure on prime cash prices. In response to this new information, we curb our enthusiasm on the prime sector. Unknowns around the timing and index construction prevent us from having stronger views at this point"
Goldman is spectacularly bankrupt. They are only in business now courtesy of the taxpayor. Now here is how we do it....all goldman sachs employees are required to stay with the firm until all their loans are paid. They are banned from any employment in finance, management, accounting, law, insurance. they may nt be employed any other cororation, bank,etc. This is how you deal with these new york types. With an iron fist. You must show them who the boss is and act like it.
How do you know Goldman is Bankrupt? If you know this, then you will also know last quarters real off balance sheet exposure to MBS and Swaps, and also their true leverage ratio. Round numbers would do fine.
Also, just briefly describe Goldman's real cash flow distribution. Foreign and domestic.
Thanks,
Mark Beck
I think the assumption goes like this: off bock MBS, mark to market accounting rules, and 1.4 quadrillion in total deriviatives. The latter is for all banks globally, but we could assume GS has a good portion of this due to the size of the banks. Oh, and the extension of the TARP. But we would have to have honesty here too on GS part.
I heard FASB is requiring all banks to go back to mark to market next year VS market to fantasy.
ABA is fighting 166/7 like a brahma bull in the pen. My bet is they prevail with a water down from FASB........but I hope I am absolutely wrong.
Letting mark-to-market back in the game would be a bigger, hotter bang for the banksters than Tiger EVER got from his many girlz.
any high school math student, ( well , maybe asian) could determine, that GS has been,is, and will be more , bankrupt, in the future. pulling in enough cash, to pay current liabilities, does not equal solvency. goldman is just a brand name. a hollow shell, housing a corrupt nucleus. the shell is disposable, the nucleus, is like an infection, it will just move to another host.
Thanks for the feedback. My point is, Goldman has had amble time to clean up its balance sheet for FASBisms. The only real trick is satisfying the IRS.
When Goldman became a Bank Holding Company it had to switch its fiscal year to the Calender year. Ouch!!! This makes it scramble time to put the IRS in order, because we have FASB and IRS kicking in together in the new year. Goldman will need to stall. Perhaps request a waiver from the IRS due to new accounting rules. But, I really think that their balance sheet will be plausible when the rubber meets the road.
The only trick not used this year by the Goldman spinologists, although it just might not be announced yet, is Goldman buying back some of its common stock, or what accountants call "Treasury stock".
Mark Beck
These are not option grants but shares given directly? For free? Well that's something I suppose in any case, for shareholders anyway. GS actually has an incentive now to boost the stock price. I'm thinking in 5 years it will be well into the 4 figures or zero.
obfuscated payments. Hopefully the public will forget..
-MobBarley
Last cyclical top took about five years,roughly from 2002-2007. So they still manage to get ahead of the retirement funds who are more like a 20-eternity long only positions. So then expect our next crash between 2015-2017(to coincide with the huge goverment debt that will be racked up by then?). (Prechter's p3 notwithstanding)...
Hey TD....
What about Glass Stegall ????
Well, if it was me, I would create some Credit Default Swaps on my shares & pocket the money that way. Just me though.
You may be forbidden from hedging the GS exposure (you'd be forced to use a similar name like Lehman or Bear, instead), and even if you can hedge that name you don't know the correct notional until vesting/clawback provisions expire.
yeah - what are the odds that Goldie provides the holders of these shares with the necessary facilities to lock in the current value (zero cost collars for example) and then lending against the package. Hey maybe the fed'll enter into a repo for them
More gimmicks from the master of double and triple reverse psychology. This is there quadruple revers phsycology in their never ending quests to lure the general public into equities,who are taking advantage of every small ralley to take their chips away from the table,to the tune of 120 bil annually. They must be ringing the alarm bells in their boardrooms,for if that trend continues,pretty soon they gonna end up owning the whole sphere of the market themselves. Ironically,isn;t that what every smart person wants to do,ownning the whole thing if you realy truely believe in it?
Where are these guys going to go? I can't remember one successful ex-goldmanite. Seems like to be profitable consistently in wall street you need to be politically connected, therefore have to be directly associated with the squid.
without government connections Goldman wouldn't even be in business today.
and if we had truly free markets in the U.S. known of those losers would survive more than a couple weeks.
Why haven't these jobs been outsourced to India yet? What do these people do other than look at numbers on charts? Can't they look at numbers on charts in India, for 1/100 the cost?
Phone bill to DC would chew up most of those savings.
voip. Which rock have you been hiding under!
hysterial.
That's remotely funny...
Ah, ironic justice.
they dont look at charts... they get baked and boozed and play whisper down the lane to create the next new financial obscurity security
Are you serious?where are they going to do?believe me,those smart people will not be able to make a dime on their own without all the insider information they get. Let us see how many of them will go and start their own companies...
They will be farmed out to important government posts. Remember Paulson didn't have to pay taxes on his $200 million because he wanted to become a benevolent servant of the public.
Not true, Goldman makes a lot on fees as a primary dealer for the FRBNYC, and as broker and agent. It's easy to make money at Goldman, all you have to do is:
RESIST THE URGE TO BE STUPID!!!!!
Collect your fees, make money on the spread, do not get greedy, and don't be stupid. That's it, collect the Christmas bonus, and stick to basics.
Lloyd, may have money, but when he is having his shoes shined, the guy doing the shine can say; "You might have influence Lloyd, but you would be working for me if the FED did not bail your ass out last year. So lets get that straight, Fool, and make that a generous tip, I have taxes to pay"
Mark Beck
Yep, its too late for any suck working at Goldman to try and play the whiz kid capitalists card.
Jesus, that company is a goner today without all their Fed money and wiping out their competitors. These bonuses, their jobs, exist ONLY because of GOVERNMENT. It really is that simple.
They regulate themselves, and they regulated their competitors out of business. They have used 2 President's in a row (at least) as their pawns.
When will we start finding out Goldman's leveraged positions? Well, it would be the trade of a lifetime, if only they couldn't get Obama and their government runners to rescue them.
This is just an attempt to front run a bank bonus tax that is getting some traction in other countries.
Tyler, I'm counting on someone being able to find out where these Goldman hacks are shopping around their contracts/agreements regarding these "shares at risk". How long before they are turned into cash? What do they think we are?
I bet that because they had to make that super hard choice to accept "shares at risk" that they just had to offset that with a real low strike price too.
Yeah but when will it go into effect? 2012?
What tax provision are their friends on Capital Hill changing for "shares at risk".
All well-timed PR fluff, delivered with a loud flourish, and a knowing wink, nod and crossed tentacle behind their, well, back (do squids have backs?) to all the little cephalopods scooping up the scraps of dead animal tissue surrounding Lord Blankfiend in the murky dark depths of his lair. "Soon enough, my little ones, soon enough you will feed. . ., " he coos in quiet, soothing tones.
Assuming these guys allready own a significant amount of stock in gs, what's to stop them from selling their current shares to suckers and algos and replace them with the bonus shares.
They might take a little loss, but they have cash in hand. And didn't break the rules.
no coincidence that that they are being paid shares after a slow walk south int the stock price as of late.
Would Tiger Woodie get a clawback if he worked for Goldman?
Clawed back.
i'll be you there is some type of no interest or fee where you can borrow against them, in essense you can get at the money in some way now
+1 for all we know it is prearranged that the shares are good at the fed discount window for loans at 25 basis points, and non-recourse to boot. That would do it. And, absent the Fed audit, we'd never know, now would we...
Bingo. That's what Goldman did for Winkelreid last year. Goldman management knows how to screw their customers and shareholders.
I could try to laugh about this, but these Goldman hacks would not even be in business if we had free markets and capitalism in the U.S.
They are riding high on their super high, runaway stock price and off turning their "shares at risk" contracts into cash and closing deals for new islands in the Carribean.
Well fuck all this. Seriously. People need to know what is going on. This is just a huge revolving government operation over there, using welfare money, they have no business even having open doors and yet they are having a party cause they put their guy in Treasury.
The shareholders will have an "advisory vote". Did anyone else laugh at that? Spin to win...
lol, there will be no windfall tax, christ they'd threaten to crash the market on that one, i'm sure paul is saying, oh they will be good guys going forward
Can they sell call options against it?
Can they be 'borrowed' by a broker/MM for short sale?
Lots of hidden ways to make money BEFORE the 5 year holding period ends.
I think Goldman got the idea of an 'advisory vote' from our government.
These guys are set for life its all about ego greed...its gotta hurt
NO BONUS FOR YOU!
(wow, the top THIRTY, huh?) ZIPPITY.
http://online.wsj.com/article/BT-CO-20091210-713300.html
this is an attempt to fog the media from the reality - everyone is getting paid billions, mostly in cash, off of their gaming of the bailout. The attempt will work, of course, because the majority are fools. It is good to be goldman.
why does our civilization have to act like a bloody random generator, hitting the problems before we can learn from them.
Because of what is known as The Comfort Zone.
Folk become used to just about anything they cannot personally do something about, that's out of their personal control.
The fatal flaw in republican government is so basic you have to wonder about the wisdom of the foundering fathers when they came up with it, and smartest man in the world at that time, Ben Franklin, warned us "...if you can keep it."
In our city we have people who live in towns decimated by the departure of skilled and unskilled labor jobs, mostly former union types. Those folk would rather live in abject poverty than move to a new town to get another job, 1)because it will pay less than their former overpaid position that sapped all the profit out of their former employer who has moved to a more favorable climate and 2) they will not uproot themselves for sentimental reasons, or are too lazy to get their asses in gear.
Comfort Zones govern it all. The frog in the gradually hotter pot pretty much captures the entire answer to your question.
Even the thieves who want billions of dollar in bonuses want them (not because they 'earned' them, know that without the lifesaving blood of the people now running in their veins) because that's comfortable. Otherwise they have to change their thinking, get uncomfortable about how they view themselves vis a vis the Masters of the Universe world they think they live in.
Your all missing the something that you will find at
tickerforum.org
Facebook- Appoint Karl Denniger as Sec. of Treasury
Wow. Thirty fucking people. I'm sure that'll make a huge difference.
Why not make *all* the employees do this?