AN ERA of bonus ''restraint'' at Goldman Sachs came to a shuddering halt as the Wall Street bank almost doubled the pay package of its chief executive, Lloyd Blankfein, to $US18.6 million for last year despite a 38 per cent slump in profits.
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Mr Blankfein, 56, who once quipped that his firm does ''God's work'', received share awards of $12.6 million on top of a $5.4 million performance-related cash bonus, and a salary of $600,000. He also received additional benefits worth $464,000, a filing by Goldman at the US Securities and Exchange Commission shows.
The postal worker's son from Brooklyn became a lightning rod for controversy over the banking industry's excesses during the financial crisis. Goldman was obliged to pay $550 million in July to settle fraud charges laid by US prosecutors over the alleged mis-selling of toxic mortgage-related derivatives. Mr Blankfein described being hit by the charges as ''one of the worst days in my professional life''.
Blankfein's pay was still far below the record $68 million that he got for 2007, before the credit crunch began to bite. But his earnings are almost double last year's $9.8 million when Goldman declared it was exercising ''restraint'' in response to public and political pressure over the size of bonuses.
''The fact that they would return to a more market-based pay is probably not surprising,'' Rose Marie Orens, a senior partner at Compensation Advisory Partners in New York, told Bloomberg News. ''It's not quite back to anything remotely like what they paid in prior years.''
It was the first time in three years that Goldman paid a cash bonus to Mr Blankfein. His top lieutenants - including the chief financial officer, David Viniar, and the chief operating officer, Gary Cohn - got identical $5.4 million pay-outs. This was despite the drop in profits to $7.71 billion due to a sharp fall in trading and investment banking.
Goldman is renowned for being fiercely competitive but it rewards its employees better than any of its rivals. Unlike other top banks, it sensed the imminent implosion in US mortgages in 2007 and heavily hedged its position to protect itself against the credit crunch. Its bonus pool, shared by 35,700 employees worldwide, amounted to $15.3 billion this year, equivalent to nearly $430,000 a person.
Even Mr Blankfein's driver appears to have done well - the bank paid $185,110 for the chief executive's car and chauffeur, more than double last year's figure.
Guardian News & Media
