Investors claim Goldman win
TWO GOLDMAN Sachs shareholders have staked the unusual claim that their lawsuit contributed to the investment bank’s decision to restrain its remuneration policy.
US-based pension funds looking after labourers and firemen, who demanded the board review the proportion of profits paid out as salary, said their action led to the lower-than-expected pay and bonus pool of $16.2bn (£10bn) for 2009. Goldman Sachs has also told its partners their total handouts will be limited to £1m in order to deflect criticism of bumper pay packages.
Law firm Grant & Eisenhofer filed the complaint on behalf of the Central Labourers’ Pension Fund and the Security Police and Fire Professionals Retirement Fund.
Partner Jay Eisenhofer said: “It is clear that Goldman Sachs’ announcement regarding decreased bonuses [and pay] for 2009 was a reaction to the pressure being brought to bear by our lawsuits and the public outcry over compensation on Wall Street. We applaud the decision of the board to listen to shareholders.”
Since it listed in 1999, Goldman has paid out around 50 per cent of net revenues as compensation each year in line with other large banks. Last year, chief executive Lloyd Blankfein took home nearly $74m in cash and shares.
This year’s salaries constituted 35.8 per cent of Goldman’s net revenues. Eisenhofer said he hoped to see a permanent shift to this level.
Goldman declined to comment.