Hot on Facebook

Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Stop Whining, Let Goldman Have Bonuses

$23B is galling, but at least the bank is sensible: Sorkin

By Jason Farago, Newser Staff

Posted Oct 13, 2009 5:45 AM CDT

(Newser) – On Thursday Goldman Sachs is set to announce its third-quarter results, but the talk of Wall Street is the size of this year's bonus pool—predicted to be more than $23 billion. That's the largest figure in the company's history and twice as much as it paid out in 2008, but for New York Times columnist Andrew Ross Sorkin, "we can’t have it both ways": After praying the banks wouldn't fail, now we don't want them to succeed.

Of course it's galling that Goldman is paying out so much, but at least its execs are paid in stock that can only be redeemed over four years—and Goldman may bring in a clawback scheme forcing employees to pay up if their trades go south. What's truly scary, writes Sorkin, is that "other, perhaps lesser firms are probably going to pay even higher bonuses" in an attempt to keep up. Unlike gilt Goldman, they can't do so without taking big risks, "and, well, we're familiar with how that story goes."

[Images (2)]

[Quotes (1)]

The home of Goldman Sachs in lower Manhattan. (AP Photo/Richard Drew, file)

Goldman Sachs CEO Lloyd C. Blankfein testifies on Capitol Hill, Wednesday, Feb. 11, 2009, before the House Financial Services Committee. (AP Photo/Haraz N. Ghanbari)

« Prev« Prev | Next »Next » Slideshow

The big question is whether the enormous sums of money are proper and whether the executives have the right incentives. On this score— putting the large amount to the side—it is actually hard to argue with Goldman’s compensation scheme. -

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

35 Brutally Honest Reasons Men Say No to Sex (The Stir)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Which Celeb Dedicated Song to Her Famous Husband Despite Divorce Rumors? (NewsOne)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 8 comments

cornelison

Oct 27, 2009 4:56 AM CDT

Bonuses for what? This is greed and gluttony in the face of the recession. This continues to show that the poor get poorer & the rich get richer.

Snowleopard

Oct 13, 2009 12:47 PM CDT

easy fix: increase taxes on the super-rich to get some of that bailout money back .

DontLikeYou___

Oct 13, 2009 12:25 PM CDT

I don't have the exact stats, but the average Wall Street CEO salary was something like 3 million in 1990. Today it is over 50 million. WTF more do they need from us??? While the average American is struggling to survive and find a job, we are supposed to say, "oh, yeah, they deserve that bonus?". I'm all for free markets and private business, but once these assholes took OUR money to bail their sorry asses, they should be held accountable to the people.

What's Popular Now on Facebook

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

Goats Have Accents: Study

New York Times (Source Grid »)

Money

executive compensation • Goldman Sachs • bonuses • financial crisis • Wall Street bailout • Andrew Ross Sorkin • clawback • executive bonuses

More Newser Stories

Wall Street Weighs Huge Bonuses Vs. Public Wrath

Small signs of restraint as bonus season begins with record profits

(NEWSER) - Wall Street this week enters that cash free-for-all known as bonus season with quite the dilemma hanging overhead: How to distribute the billions in record-breaking profits reaped this year without incurring public wrath? Goldman Sachs expects to give out an average of $595,000, the New York Times reports, and the question for some banks is how many digits bonuses will have—six, seven, or even eight? More»

Bailed-Out Bank Execs Made $1.6B Last Year

Execs made average of $2.6 million; Merrill Lynch CEO made $83 million

(AP) - Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an AP analysis reveals. Benefits at bailed-out institutions like Goldman Sachs, Merrill Lynch, and JPMorgan Chase included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships, and professional money management. More»

Morgan Stanley to Withhold Bonuses Until Bets Pay Off

Wall Street showing bonus season restraint

(NEWSER) - Attempting to curb criticism after taking billions in government bailout cash, Morgan Stanley has attached a “claw-back” provision to employee bonuses this year that allows the bank to withhold payouts if employees don’t manage risk properly. The Wall Street behemoth will hold onto a portion of employees’ bonuses for 3 years, paying in full only if strategies prove effective in the long-term, the New York Times reports. More»

Wall St. Bonuses Are Down, but Hardly Out

Even giants taking a federal handout set aside millions for execs

(NEWSER) - Wall Street bonuses could top $23 billion this year despite the woes of the global economy, Forbes reports. Indeed, that figure is down some 30% from last year’s $33.2 billion, but a smaller pool of employees, competition among companies to keep top performers, and the effects of mergers will help ensure many of the Street’s stars still walk away with millions. More»

Hey, Wall Street: Shut Up About Bonuses

Matt Taibbi says bankers are still overpaid

(NEWSER) - Matt Taibbi was incredulous when he read a recent New York piece in which Wall Street denizens whined that Dodd-Frank was limiting their bonuses. "I watch what I spend," one banker lamented, "but my girlfriend likes to eat good food," which adds up fast. "Quelle horreur!" Taibbi quips in Rolling Stone , before shredding the argument. Actually, bank compensation is falling because of the European debt crisis. Bankers he knows are saying things like, "If the ECB doesn't come up with a Greek bailout package, I'm going to have to sell my children for dog food." And at some banks (like Goldman Sachs), bonuses are actually up relative to earnings. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Stop Whining, Let Goldman Have Bonuses