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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 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

By Gary Rivlin, The Daily Beast

19 October 11


Occupy Wall Street: Take the Bull by the Horns


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? your social media marketing partner


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+51 # maddave 2011-10-19 21:36

Goldman Sachs needs to be Nationalized and broken up.
+23 # AndreM5 2011-10-20 09:05
Goldman/Sachs ALREADY IS nationalized in one sense: it owns Congress so it completely runs monetary and financial policy.
+6 # robertsgt40 2011-10-21 08:10
Broken up...then en get our money back
+21 # pernsey 2011-10-19 21:53
OMG!!! This is beyond obscene!!!!
+20 # DPM 2011-10-19 22:18
At least, in the Mafia, there was something of a "code" of loyalty. Otherwise, what's the difference?
+16 # krispykremeyum 2011-10-20 08:41
Yep...I respect the mafia least they're up front about their intentions.
+23 # tsubow 2011-10-19 23:28
How many millions, billions,plus stock options does it take for one person to feel secure enough to say, "I have enough money and security?"
+4 # maddave 2011-10-21 07:08
There is no "enough". Money is an abstract concept by which ego-driven corporations and management keep score.
+27 # tomo 2011-10-20 00:00
Yesterday, I watched Timothy Geithner being grilled by what I take to have been the Senate Small Business Committee. First, Republican Olympia Snowe asked why the Secretary had done nothing about jobs. Geithner replied that he's very interested in jobs, but there is a lack of "demand" out there--but that if ever the time was ripe for jobs, he would certainly do a great deal. Then Democrat Maria Cantwell asked Geithner why it had taken a few days to bail out the major banks, but it has not been possible in nearly three years to provide much help to ordinary Americans. Geithner assured her he is very interested in ordinary Americans, but there is a lack of "demand" out there--but that he would certainly do a great deal for ordinary Americans when the opportunity presented itself. In short, Geithner was saying that, while it had been possible to bail out the banks by some very steep interventions in the free market, nothing similar could be done for ordinary Americans.
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!
+9 # pres 2011-10-20 00:23
Gee don't be so hard on them!
They are just living the American Dream -and somebody has to pay for it. :-)
+8 # Rita Walpole Ague 2011-10-20 01:15
Evil! G.S. and the other 1% Wall Street and military/indust rial/terrorism complex villainaires need any and all who worship and love a man/God named Jesus, to follow their Savior's example and boot the money grabbers out of temple. How best to boot out?

Maddave is right on! Boot 'em via Nationalizing and breading up.
+22 # Ralph Averill 2011-10-20 02:27
What's more maddening, Goldman-Sachs compensation is chicken feed compared to hedge fund salaries and bonuses, which can go to eight, nine, and, in the case of whatsisname Paulsen, ten figures. Over a billion dollars for creating nothing! Nobody is worth that kind of money. Not financiers, not CEO's, not athletes, or movie stars, or rock stars and we should have a tax system that prevents that kind of power in the hands of so few individuals.
+24 # JohnRussell2012 2011-10-20 04:54
WE MUST have a 21st Century revised edition of Glass-Steagel! BAN outright the programmed algorithm "skimming" /trading that Goldman et al do every day that merely commits thievery from the retail investor.

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
+30 # artful 2011-10-20 06:51
The SOB's should be in prison cells.
+17 # walt 2011-10-20 06:56
This is incredible to see these crooks hoarding the peoples' money for themselves. Bonuses are their priority as they continue to siphon off what they can. And when will we stop bringing Wall Streeters, especially from Goldman-Sachs, into the government and Cabinet. Bush's Sec. of the Treasury Paulsen was one and was on duty for the collapse. He's worth something like $700 million! When will we wake up and demand action? We are all angered as the NYPD arrests innocent protesters while these crooks go about their "business."
Occupy Wall Street and demand prosecutions!
+15 # MainStreetMentor 2011-10-20 07:58
Instead of our employing the vague, non-descript, ambiguous titles of companies, we need to concentrate on using those companies CEO’s names. An all-encompassin g company name dismisses responsibility and accountability of miscreant behavior – due to the “buck-passing” finger-pointing of its’ vast membership. As an example: When speaking of Goldman Sachs – the true representation is Lloyd Blankfein … he IS Goldman Sachs! (When there is a rogue bull elephant running amuck, we no longer speak of the herd, but rather that specific rouge – so must it be with the “Wall Street herd”). The other Wall Street companies CEO malefactor’s names should be interchangeable with the names of the companies they head. We need to put a much more personal identity on the cancer that is Wall Street, and provide names of the specific malignancies that perpetuate it. And … we need to replace and perpetuate those companies’ identities with those individuals’ names.
+3 # usedtobesupermom 2011-10-20 10:12
Good idea! May I share your comment?
+1 # MainStreetMentor 2011-10-20 14:10
+6 # MainStreetMentor 2011-10-20 08:13
He served his time in Afghanistan,
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.
0 # Martintfre 2011-10-20 08:25

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
+8 # jwb110 2011-10-20 09:51
I think it is safe to say that the GOP/TP and Corporate America are moving us more and more to a Fascist System. Not all the boys at the top are safe from reprisals should this happen. The kind of hate and fear mongering that it takes to move a country to Fascism is going to move from scapegoat to scapegoat in order to harness a base. For the Conservative Christians the Pink Triangle is the call to arms. Once that reaches its' Final Solution what symbol and color comes next?
-1 # Martintfre 2011-10-20 12:28
//I think it is safe to say that the GOP/TP and Corporate America are moving us more and more to a Fascist System. //

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.
+5 # fredboy 2011-10-20 09:57
And derivatives continue as the nation's new alchemy...
+5 # Doubter 2011-10-20 10:22
Makes me wish I believed in Hell!
+3 # reiverpacific 2011-10-20 10:47
I may be naive but I wonder if these "Suits' are really happy?
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.
+3 # Activista 2011-10-20 11:55
I agree - these people are NOT free - not happy. All they know is Money Culture.
People genes/nature is very different - read work of E. J. Wilson.
+4 # Miguel Grande 2011-10-21 07:43
In 1892 the Banksters put their plan to paper,


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