MESS AFTER MELTDOWN

Investors ask Goldman to be less greedy

Agencies

Posted: Saturday, Nov 21, 2009 at 0005 hrs IST
Updated: Saturday, Nov 21, 2009 at 0005 hrs IST


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: Some of Goldman Sachs Group Inc’s largest shareholders have asked the company to cut the size of its bonus pool and pass along more of its profits to investors, the Wall Street Journal reported, citing people familiar with the situation.

Although the shareholders were not pushing for a huge cut in the bonus pools, they feel that Goldman should better reward shareholders for this year’s rebound, the paper said.

Goldman has faced public ridicule for setting aside nearly $17 billion for year-end bonuses after receiving a $10 billion taxpayer bailout during the financial crisis. The bank has paid back the government money.

Goldman, which has reported robust profits in the past two quarters, could not be immediately reached for comment outside regular US business hours.

Mean while, Meredith Whitney, the analyst who cut her rating on Goldman Sachs Group Inc in October, said the bank has lost some of its top-performing employees as executives left to start their own investment companies. “Goldman’s lost a tremendous amount of talent going to set up their own hedge funds,” Whitney, founder of Meredith Whitney Advisory Group, said today in an interview on Bloomberg Radio. “It became a scary prospect of having the government determine what you make,” said Whitney, who also said today that bank stocks are “grossly overvalued.”

The Federal Reserve said last month it will review the 28 largest banks to ensure pay doesn’t create incentives to make the kinds of risky investments that brought the financial system to the edge of collapse, prompting bailouts of firms including Bank of America Corp and Citigroup Inc. Goldman Sachs chief executive officer Lloyd Blankfein said in May the bank, the most profitable Wall Street firm in history, was having no more trouble than usual in retaining employees.

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Posted by henry matheus on 2009-11-23 04:54:12.210103+05:30
Ok, re the shareholder request:..let's please put things in perspective and clarify the context of the "bonus numbers". After saying that Goldman received the $10 Million from the bailout---which they really didn't want to get involved with, per my understanding--- You DID mention they paid it back. So the whole bailout thing is a bit of a "moot point:. Clarification requestd: ?Compared to the bonus pool of $17 billion--HOW MUCH did those employes generate? ?What % of earning / profits is that 17 billion?? That's surely a figure that matters....vs how much for shareholders in a) stock price increase already dividends? HM

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