Goldman Sachs top execs awarded $50m in restricted stock after falling profits and layoffs
Protesters from the ‘World Development Movement’ demonstrate outside the offices of investment bank Goldman Sachs on Oct 27 in London
After a year in which Goldman Sachs cut 2,400 jobs and saw its profits fall by half, the investment bank on Wednesday handed out nearly $50 million in restricted stock awards to 11 of its top-tier executives, the Reuters news agency reported today.
Lloyd Blankfein, CEO, David Viniar, CFO, Gary Cohn, Goldman’s COO, as well as Vice Chairman John Weinberg each received 45,497 shares valued at $5.1 million based Goldman’s Friday closing price of $111.77, Reuters said, citing filings with the US Securities and Exchange Commission. Seven others received previously awarded share packages worth $2.8 million to $5 million, Reuters said.
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Reuters said the stock awards were made Wednesday when executives received access to the shares.
The news came as The New York Times reported that Goldman employees constituted the single largest source of campaign donations to GOP presidential hopeful Mitt Romney through the end of September, having donated at least $367,000 by then.
Rival candidate Newt Gingrich suggested at a Republican debate in Florida on Thursday that Romney had profited via Goldman from banks that foreclosed on homeowners in the state, an epicenter of the housing crisis.
According to Reuters, Wednesday’s awards were restricted under a 2009 scheme of executive compensation allowed executives to receive stock but restricted them from selling it for several years – an effort to tie incentives to performance and prevent recipients from quickly selling off stock before the company’s share price goes down.
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Anger was aroused last year when some of these restricted pay packages came due, according to Reuters, as they kept compensation costly at a time when the investment houses were cutting jobs and bonus pools due to falling revenues.
Last year, Goldman paid $12.2 billion in compensation, a 21 percent drop over 2010, according to Reuters. But compensation as a share of revenue rose from 39.3 percent to 42.4 percent due to falling revenues.