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.

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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.”

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Goldman Sachs Posts Nearly $5 Billion In Profit While Restrains Compensation In Q4

January 21, 2010 by · Leave a Comment
Filed under: Industry News 

Quite a good quarter for the Goldman Sachs boys.  With the amount of bailout they got through AIG via the treasury, you better be able to make money.  We have a huge swing in the markets in 2009 and GS was flush with cash and was able to deploy it and ride the wave up.  I do like they are trying compensation packages to stocks and not cash so the employees goals are aligned with long-term profitability of the firm.

I personally have no problem with a investment bank being profitably, but if we are going to have them unregulated, we need to let them fail when they get to greedy and lets them be rewarded by our markets when they are more clever than the rest, THAT is real capitalism.

New York – Dow Jones – Goldman Sachs Group Inc. (GS) on Thursday delivered its richest quarterly profit in the investment bank’s 140-year history, driven in part because it restrained compensation amid a public outcry about excessive pay.

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Goldman Sachs Blankfein Says He Wasn’t Asked to Take AIG Discount on Swaps

January 13, 2010 by · Leave a Comment
Filed under: Legal News 

What a bombshell!  Now we know the fix was in, Treasury did not even bother to offer a discount to AIG’s counter-parties.  So it was a de facto bailout of Goldman Sachs among other firms and foreign banks visa-vi the U.S. taxpayer.   What is even better about this bailout is that is didn’t fall under TARP restrictions, didn’t need to be paid back and Goldman will be paying huge bonuses this year with the taxpayers money.

Also, unlike the commercial banks, I doubt we would of went over the edge if they failed.  Yes, investment banks are important and they make markets but we would of been able to survive without bailing them out.  That’s capitalism, winner succeed and losers fail.  I think Mr.  Geithner will have some explaining to do if not having to resign over the fallout.

Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein testified that he was never asked by U.S. regulators to accept a discount on investment contracts his firm had with American International Group Inc.

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4 U.S. Banks Repay $54.7 Billion in Tarp Bailout Funds

June 17, 2009 by · Leave a Comment
Filed under: Industry News 

This is a good sign, I am glad to see these fund get repaid back.  This is going to create pressure on the banks that do not have the ability to repay these government loans.  In a sense, this has now separated the banks into two categories (TARPed and Non-TARPed) and one categoery is clearly stronger than the other.  This should let the market now reward or punish the good and bad banks we have.

If you can not repay these loans then clearly you are currently in a weaker position than your rivals.  In the business of banking, 95% of the business is based on “trust” and “confidence” and when you are in short supply of both, then you usually go out of business.   I want too see only strong and prudent banks surviving.   I love good banks and despise bad ones.  In all my history on banking I have read, this is the way of the world and it should not change now.

News (Bloomberg):

JPMorgan Chase & Co. and four of the nation’s largest banks repaid $54.7 billion to the U.S. Treasury’s bailout fund in a step toward ridding themselves of government restrictions on lending and pay.

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