With the news media, and consequently, politicians, focusing on the pay of banking executives, Goldman Sachs (NYSE:GS) CEO Lloyd Blankfein is looking at weighting their pay with more equity in order to calm the negative perceptions concerning executive pay.
A recent report in the Financial Times states that not only will the pay be weighted differently, but possibly all annual senior executive bonuses could be paid by stock in the company. That would include Blankfein himself. Bonuses for other employees would also be increased in stock, rather than cash, although it probably wouldn’t be all in stock as the senior executives would receive.
At this time employees at Goldman Sachs receive up to 75 percent of their bonuses in restricted stock or options.
Goldman has been meeting with major shareholders and investors in order to explain the reasoning behind why the pay levels of its people are justified by the performance of the company.
Shareholders have offered five proposals to the company, of which three are in connection to employee compensation. Of those, it’s thought one could pass which would require Goldman to reveal in more detail how executives at the company are compensated. Goldman recently put together a 14-page guide to explain why its compensation policy is justified.
The 14-page memo talking of the compensation practices at the company states that along with the stock being a more significant part of the pay package for its highest executives and earners, multi-year guaranteed pay contracts would also be prohibited from now on.
In the first half of 2009, compensation and benefits for employees of the company rose 33 percent, which equaled $386,429 for each worker. Revenue during that period jumped almost the same percentage, surging 31 percent.
For the year, Goldman workers are looking for compensation of close to $717,000, close to twice as much as the $364,000 they received last year.
