Rivlin writes: "Through the first nine months of 2011, Goldman set aside $10 billion in its compensation fund. If Goldman's 30,000 employees split that bounty evenly, that would work out to $333,000 per person - plus the billions more Goldman will no doubt set aside in the last few months of the year."
Goldman Sachs CEO Lloyd Blankfein received $13 million in compensation last year, after his base salary was raised to $2 million. (photo: Jim Young/Reuters)
Goldman Execs Stay Fat and Happy
19 October 11
The investment bank had a lousy third quarter, but employees will still take home billions in bonuses. Gary Rivlin asks, what gives?
oday's Goldman Sachs earning reports provides a valuable lesson on how things really work inside Wall Street's largest investment houses. Goldman Sachs had an awful three months, losing $428 million in the third quarter of 2011, and yet it continued to shovel billions into the bonus pool it will share with its employees at year's end.
Through the first nine months of 2011, Goldman set aside $10 billion in its compensation fund. If Goldman's 30,000 employees split that bounty evenly, that would work out to $333,000 per person - plus the billions more Goldman will no doubt set aside in the last few months of the year.
Of course, the receptionist inside Goldman Sachs doesn't receive the same pay as all those analysts and other midlevel suits making salaries of $400,000 a year or more. Moreover, chieftains like Goldman CEO Lloyd Blankfein, who received $13 million in compensation last year, won't have to share their year-end bonuses with as many people as last year. The bank laid off 1,300 employees in the third quarter of the year and plans on jettisoning another 1,000-plus jobs in the coming months.
Still, there are no doubt plenty of frowns inside Goldman today. For one thing, this was only the second time the investment bank has reported a quarterly loss since going public in 1999. For another, though this year promises to be a fat one, it won't be as rich as 2010.
That $10 billion lags last year's bonus pool - by 24 percent. But then the company's profits per share through the first nine months of the year were down more than 70 percent compared with 2010 - and Goldman's stock since the start of the year has fallen by 43 percent.
But that's the beauty of working at a major investment bank. Performance doesn't matter nearly as much as just showing up. Goldman booked $13 billion in pre-tax profits in 2010 - a steep drop from the $20 billion the bank booked in 2009. Despite a precipitous drop in profits between 2009 and 2010 and a stock stuck in neutral throughout the year, the Goldman board of directors raised Blankfein's base salary to $2 million, up from $600,000, and showered an extra $13 million in stock grants on Blankfein and his executive team.
Not bad for the executives of a bank forced to pay a $550 million fine after being accused by the SEC of duping its clients by selling them shares of a mortgage-backed security they allowed a hedge firm to secretly hand-pick. Still, this is hardly like the fat and happy subprime-mortgage days, when Goldman was buying toxic subprime mortgages and selling them to unsuspecting clients. In 2007, the year before the economic collapse, Blankfein made $68 million in stock and bonus money.
Is it any wonder the Occupy Wall Street crowd might think there's something rotten about the system?
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Goldman Sachs needs to be Nationalized and broken up.
In short, the Treasury helps its friends, but only the "invisible hand" can help the rest of us. At that moment I realized Obama will probably be re-elected. Nobody has in our whole history helped CEO's more than he has. And Geithner, for all his apparent ineptitude, has actually done exactly what he and Obama have meant to do. Poor America!
They are just living the American Dream -and somebody has to pay for it. :-)
Maddave is right on! Boot 'em via Nationalizing and breading up.
We MUST put in place a 0.05% transaction tax on ALL equity trades which would really put the brakes on the "skimming" thusly described. Elliott Spitzer confirmed what I have contended for years that about HALF of ALL daily trades taking place in the markets are of this sort.
Such shenanigans increases both volatility and risk, in particular for the retail investor who is not engaged in this practice which is exclusive to the Wall Street "set-up."
John Russell, Dade City, Fl
Occupy Wall Street and demand prosecutions!
He made it back, dismayed
Oil’d been the driving force
The “Greedies” old charade …
He tried to tend to business,
And place that war behind …
But a question still was bothersome
On the backstreets of his mind
Wall Street foreclosed his house;
Valeries’ ID was blown;
His business, too, went “belly up”
From kakistocracy enthroned.
But onward still he persevered …
His country had his back
He worked and voted for
The man he called Barack
And now there’s nothing left …
No hero … no belief …
No house … no job …
Just monetary grief
He found the answer to
That question in his mind:
Yes, Greed now is the god
Within our government entwined.
Ofcourse the execs stay fat and happy - their campaign contributions to Obama are investments that are paying off.
The bailouts that Senator Obama votes for, the TARP bills President Obama voted for.
The watering down of the AUDIT THE FED bill the democrats did...
no one should be surprised that FASCISM is live and well
Obama is the biggest corporate whore the world has ever seen
Then you think wrongly.
As a Tea Party member I know for a fact that the government bail outs are unconstitutiona l and yes it is fascism and I an other TP members are opposed because companies do not have a right to funds extorted from the tax payers given to them by low politicians in high places.
As a citizen and as a tax payer It matters not if it was Bush or Obama who give away our money, it is wrong.
They really aren't free people (I've known some in the corporate high-paid category described here) and they seem to me to be trapped in a system which doesn't allow them to be whatever they really might be. They wear a stylish uniform, behave in a proscribed way and follow orders just as sure as the military, and as likely as not live in gated non-communities.
They isolate themselves from any but their own corporate reality and all their material acquisitions seem to bring them little joy, as spoiled kids who take their "toys" for granted.
Sure, I am one of the "New Poor" but I do what I love for what little I make, have pride in my productivity and unique creativity and try to be a contributing part of my community, sharing the struggle for survival and even a little growth.
They may look down from on high from their architecturally appalling and space-gobbling glass towers, at the OWS masses but I wonder if there isn't just a trace of envy in what they see; fellowship, mutual aid and support forming an irresistible force, growing and shaking their very foundations?
"Ah make the most of what we yet may spend,
Before we too into the dust descend,
Dust into Dust and under Dust to lie,
Sans Wine, sans Song, sans Singer, and -sans End!
Omar Kayyam.
People genes/nature is very different - read work of E. J. Wilson.
http://www.heyokamagazine.com/heyoka_magazine.27.bankersmanifesto.htm
99%
TOO BIG TO FAIL!!
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