The top seven executives at Goldman Sachs (NYSE:GS) will take no bonuses for 2008. That will leave them with their $600,000 base salaries and perhaps the status of heroes as Wall Street crumbles. According to The Wall Street Journal, "they are giving up potentially tens of millions of dollars in payouts in a year that reshaped the securities industry."
It is also a politically savvy move which may move Goldman out of the spotlight as being a firm where greed rules and bankers will do anything to make money, even at the expense of the financial markets.
Probably none of the people on the list needs the money, but Goldman needs a boost to its reputation. The firm did make bets that mortgage-backed securities, some of which it sold, would fall in price. It is also famous for handing out money to partners as if it were candy. Plus, its shareholder have taken a beating as the company's stock has fallen to $247 to $67.
Perhaps the most interesting question now is whether other Wall Street fat cats will follow. There is pressure from Congress for large financial firms taking bailout money not to have that cash leave the companies in the form of compensation. Goldman has upped that pressure on its peers by setting a precedent.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 7)
11-17-2008 @ 5:36AM
sgentilejr said...
Congratulations and thank you to the executives of Goldman Sachs for setting a fine example for all corporate executives to follow in these difficult economic times. When companies ask their employees to make sacrafices, and endure layoffs it is comforting to see the top executives shrae in the sacrafices.
I is also comforting to the shareholders.
11-17-2008 @ 8:27AM
Robert Zorzi said...
OK, so the top 7 didn't take the bonus. kudos.. How about the other billions in bonus being paid out to the rest of them. No big deal usually, however the 25 billion dollars that they just got from the taxpayers should preempt all bonuses. Especially for all the fraud collision and mishandling of funds that helped cause this fiasco!
11-17-2008 @ 8:30AM
Kimberly said...
I'll give credit where credit is due... GOOD JOB! Let's hope that those who need to follow suit.
Funny I found this article in fine print while "Citi cuts 50K jobs" is in big bolt print on my sign in page.
Ugh.
11-17-2008 @ 8:36AM
Beth said...
Good they should give up their bonuses. In these times where every day Joesephine's are switching to generic toilet paper and watching our pennies, it is criminal for these execs to get obscene bonuses especially given the poor performances of their companies
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11-17-2008 @ 8:53AM
pushka said...
Every single CEO and counter part who receives a bonus this year should give it back. It's the right thing to do especially in AIG's case how do these people sleep at night knowing that they helped in some way with this issue. Enron was the warning that something was coming down the pipe it's to bad the government didn't pay better attention to that blip on the map.
11-17-2008 @ 9:39AM
Susan Cuscani said...
It's about time someone got it!!! Now if the milionaires and billionaires in congress and the Senate woud follow Goldman maybe we could dig ourselves out of the hole they put us in.
11-17-2008 @ 8:56AM
Mike said...
I am now playing the worlds smallest violin for these fat cats. They are thieves and will always be thieves.
Who is going to bail me out?
11-17-2008 @ 9:27AM
La Toya Murphy said...
Ok... I'll give them some credit... for now. Thanks for no bonuses this year, but I don't expect you to keep up this act for long though. At least wait til the economy is back up, then continue fattening your wallets, I would.
11-17-2008 @ 9:06AM
tom said...
Why is the government giving money to a firm to support the stockholders AND allow bonuses to other employees. Some of these bonuses will be over $100,000. Why are these employees and the firm's shareholder so deserving of out money. Heck, they already have salaries being paid to them. I just don't understand what rules the government does bailouts and kicks the taxpayer in the other pocket by allowing ANY bonuses at all for these firms.
AIG is still doing first class plane flights and paying significant bonuses also. Where does this crap stop!
Tom
11-17-2008 @ 9:13AM
who cares said...
big fricken waaaaah... who cares. now maybe just maybe they will quit playin with the working peoples money and I hope they will know what it feels like to struggle..why the hell are they needing bonuses with the ridiculous amount of money they make already?
11-17-2008 @ 9:42AM
daniel said...
Come on it is a ruse,,, a tiger can't change their stripes and these are greedy wall street bank people,,,they may forego the fat cat bonus but you can bet the company will comensate them some other way,, they will just not call it a bonus,,, like maybe a rolls royce for their birthay ar something like that,,,' half of them shoud be in jail not crying about thier bounus
11-17-2008 @ 9:29AM
Cheryl said...
Well it looks like one of the companies who we the American Taxpayers helped bailout got the message for now... How long it lasts is anyone's guess. Me thinks that they need to cut their income, too... if even by 25,000 or 50,000 a year, it would help...if not more... Let's hope a couple of other companies follow suit... From the looks of it, AIG won't be playing follow the leader... they still don't get it.
11-17-2008 @ 9:29AM
FB said...
Considereded HEROES?? Their stock dropped from $247 to $67. Seems like common sense, not heroic. How warped is that?!
11-17-2008 @ 9:49AM
j said...
Hey there thinking,,,,,,,don't buy this PR move. They will make sure they get the cash one day and out of site.
11-17-2008 @ 9:35AM
Barbra said...
There shouldn't be any congratulations offered to these execs who have opted to not getting a bonus when tax payers are footing the bill. There should be no question about it at all. Of course they should get NO bonuses for leading their company down the drain and helping cause one of the most disastrous world financial crisis we've seen yet.
11-17-2008 @ 9:38AM
JOJO said...
This is a joke, they will just give themselves more $$ next year to make up for it.
11-17-2008 @ 9:46AM
EMIL J KOVACH JR said...
Goldman's Days--As a HEDGE FUND--Are Over, If Ever Their Was A 45.00 Stock--This Is It. The Next 12 Months--Will Be A Hard Market, To Make A Buck In, Especially For Goldman.
EMIL J KOVACH JR
11-17-2008 @ 9:43AM
RobTheBlogger said...
I'm surprised no one has taken out one of these greedy corporate execs yet
11-17-2008 @ 10:24AM
allen irvin said...
since when does anyone deserve any bonus for a company losing money ? it is supposed to be a reward or incentive for good results, not failure.
11-17-2008 @ 9:49AM
jim said...
Excellent, now we can give more to the greedy idiots at AIG