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Shareholders ask Goldman to cut bonus for executives

Source: PTI
November 20, 2009 18:26 IST
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Financial service provider Goldman Sachs Group Inc's shareholders have asked the company to cut the size of bonuses to be paid to executives and reward them instead, a media report says.

"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," the Wall Street Journal said.

In an analysts meeting, Goldman shareholders have expressed concern that there have been changes in the firm's financial statement which make the per-employee compensation look much less than what they are paid actually.

"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 Wall Street firm is on track to make the biggest employee payout in the firm's 140-year history. The Journal said that due to changes in the financial statement Goldman employees would earn about $717,000 per person in 2009.

Quoting people familiar with the development, the Journal said: "The shareholders have said that reining in the bonus pool would deliver an upward jolt to per-share earnings and the share price" of the financial major.

On whether Goldman should share more of its wealth with investors, the paper cited the company spokesman saying "have historically been more focused on the absolute return on equity and on book value per share growth" than per-share earnings.

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