Goldman Sachs Board Rejects Shareholder Demands on Pay Restrictions

March 3, 2010 by · Leave a Comment
Filed under: Stock Market News 

No surprise this request from Goldman shareholders fell on deaf ears.  This issue will only be settled in the courts.  Goldman has a reputation of lavish compensation and that creates an environment that makes smart people who want to work hard and make oddles of cash.  That could be the reason why the board didn’t want to do anything that could possible tarnish that image regardless of the the public opinion is off their compensation.

Wall Street Journal – Goldman Sachs Group Inc. said its board of directors rejected demands from shareholders that the investment bank investigate excessive compensation and take steps to recoup some awards given to executives.

The company reported in a filing with the Securities and Exchange Commission that it received several letters from shareholders asking for the firm to revamp the way it pays out salaries, benefits and compensation. Goldman’s board “rejected the demands,” according to the filing.

Goldman said shareholders have filed lawsuits in December alleging the board of directors “breached its fiduciary duties” over setting high compensation levels. The complaints seek restitution for some of the compensation paid, and an order requiring the firm to reform the way it pays employees.

Big Wall Street bonuses have come under attack in Washington and among voters. Executives at Goldman have said that top employees should be paid fairly, but defused public outrage over pay by slashing executive compensation for 2009.

Wall Street’s biggest investment bank said it will pay employees based on performance, the firm’s overall profit level and the economic environment. In 2009, Goldman made the smallest compensation payout relative to revenue in its history as a public company. But staffers hardly went home empty-handed; the firm set aside $16.9 billion for compensation and benefits and employees made an average of $500,000 a person.

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