Feinberg Says He Spoke With Goldman Sachs CEO About Compensation Plans

February 8, 2010 by · Leave a Comment
Filed under: Policy News 

It is good we are seeing more compensation that is based on performance of the stock of a firm and not large cash payments that could encourage one-time bumps in earnings for bonuses even if they are putting the firm into more risk.   Over time this will also help shareholders because everyones goals will be much more aligned and investors can have more confidence investing in these firms for the long-term, opposed to speculating.

Bloomberg – Kenneth Feinberg, the U.S. special master on executive compensation, said Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein consulted with him on the firm’s pay plans and adopted his “prescriptions.”

Feinberg and Blankfein spoke “about how Goldman as an institution should approach base salaries and compensation over time,” Feinberg said today in a Bloomberg Television interview. “To a large extent I think he has succeeded in adopting the prescriptions we laid out.”

Goldman Sachs, whose shares doubled last year as profit soared to an all-time high, awarded Blankfein, 55, an all-stock bonus for 2009, according to a Feb. 5 filing with the U.S. Securities and Exchange Commission. Blankfein’s payment of 58,381 restricted stock units, valued at $9 million at the Feb. 5 closing price of $154.16, falls short of the Wall Street record $67.9 million he received in 2007.

Feinberg, who has no formal authority over Goldman Sachs compensation, in October ordered pay cuts averaging 50 percent for the top 25 executives at Citigroup Inc., Bank of America Corp. and five other firms that took U.S. bailout money. The two banks repaid the funds in December, enabling them to leave his supervision. Feinberg now oversees pay packages for executives of American International Group Inc., Chrysler Group LLC, Chrysler Financial Corp., General Motors Co. and GMAC Inc.

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