CNBC's Charlie Gasparino reports that "Rival banks are eagerly awaiting this week's earnings announcement from Goldman Sachs (NYSE: GS) not only for the third-quarter results but for how the firm deals with up to $20 billion in bonuses just a year after it received federal bailout money during the height of the financial crisis."
With third quarter earnings expected to ring in at more than $2 billion, Goldman is prepared to pay out some hefty bonuses. The problem? Given that Goldman Sachs received a taxpayer bailout only a year ago, paying out massive cash bonuses now could lead to a significant public relations backlash.
Gasparino reports that Goldman may seek to assuage this concern by paying out a large chunk of its bonuses in the form of company stock rather than cash, thereby tying the value of compensation to the long-term health of the company.
That may make sense, but I have an idea for how Goldman can deal with the negative publicity: Ignore it. Goldman Sachs is not Wal-Mart (NYSE: WMT); it doesn't depend on the goodwill of millions of consumers in order to profit. Goldman doesn't have a strong retail operation, and generates profits mainly through trading, investment banking, and wealth management for uber-net worth families.
Sure: It's never fun when people are saying mean things about you. But Goldman Sachs' business model doesn't make its reputation among the masses important. As long as its cadre of clients still have faith in its ability to make them rich, Goldman can prosper.











Reader Comments (Page 1 of 2)
10-12-2009 @ 7:59AM
interested said...
Why are we not surprised?
10-12-2009 @ 8:15AM
M said...
Why should Goldman-Sachs be concerned with public opinion? Because it is Public Tax Dollars that keep them in business!!! If they again pay huge bonuses to executives who would have bankrupted their company without the taxpayer-financed bailout, the Public will demand of their government an immediate repayment of the loans, and it will be justified. Is that reason enough for you????
I am sick of hearing how "executives" are paying themselves huge unearned bonuses from the companies they have bankrupted by their inept, greedy and self-serving practices. Such executives should be held accountable, and will be if they again rob from the taxpayers to enrich themselves.
10-12-2009 @ 8:19AM
Scott Thoburn said...
Part of Goldman's huge profits came from Flash Trading which is nothing more than legal cheating. Flash Trading undermines any idea of a fair market. I can't trade on inside information so why should Goldman be able to do it?
10-12-2009 @ 8:27AM
servicemasterwv said...
ahhhh have these a holes paid me and all the other taxpayers back ?????
10-12-2009 @ 9:28AM
jacobsw53 said...
I want the bailout money with 50% interest paid back since I'm out to make money as well and while they are at it, they can get their bonuses when my 401k is restored to pre-meltdown condition with a 20% 2 year adder to make up for the gains I've lost. Its only fair since the banks don't want to hear your tales of woe about losing your job and how you can't pay your mortgage. I think total restitution is fair since they gambeled with our money and lost. I really don't care if they survive.....they should have all been jailed for the biggest ponzi scheme going.....their the only ones theat got rich.
10-12-2009 @ 9:36AM
JJMartin said...
Ignore it, the greedy man says. Yes, that's what the taxpayers should have done last year. Ignore it. Let them fail. Maybe then the greedy man will learn something about humility. Arrogant SOB....By the way, while GS is paying out their bonuses, when do we taxpayers get our money back?
10-12-2009 @ 9:39AM
dang1067 said...
While you people are busy entertained and distracted by the gay-rights, healthcare, H1N1 bullsh!ts, the parasitesitc Wall Street and Goldman Sachs are busy jacking oil-price for no apparent reason. While Goldman Sachs entertains you people with their billion profits and billion bonuses, they're busy robbing and raping all your fvcking assses!!!!
10-12-2009 @ 10:31PM
anthony lamanda said...
Yeah What else is new. back to the same old Wall street stuff. Guys making billions in bonusses right after the tax payer bailed them out 1 year ago. Does anyone realize how many small businesses went out of business this year. What did they get nothing, and they are the people that are responsible for employing 8o% of the country. What a joke, but who am I to say how much some one can make.
10-12-2009 @ 10:22AM
dajt57 said...
re regulate. how come no one is lifting a finger to re regulate and bust ip these monopolies? and instead of bonuses have they paid back the money from the taxpayers? WITH INTEREST?
10-12-2009 @ 10:48AM
crazydmp said...
wow, that it is quick recovery, 20 billion
don't forget the pions that actually do
the work.
10-12-2009 @ 11:03AM
diplobrat said...
Sacks of Gold, Man! The Anti-Robbin' the Hood is at its best! And the rich keep getting richer. How?By profiteering from the lowly peons whose taxes bailed their candy a$$e$ out! Perhaps the terrorists hit the wrong building?
10-12-2009 @ 11:09AM
margarita said...
Funny. Real funny.
Maybe all who voted for O will ignore the fact that the current administration basically left out a clause in the bailouts to prohibit bonuses to these companies with tax-payer money. Joke's on us.
Don't ignore the facts next election. Vote em out all across the board. Now, that's real change we can depend on.
10-12-2009 @ 11:19AM
depfrz71 said...
when will our government take care of the working class and stop taking care of these rich bankers and oil specualtors that have destroyed out country, "NEVER" we need to take our country back and make these robbers and cheats pay for their treason, including the lawmakers that have backed them, we will never get back all they took. they have destroyed the middle class and kept the lower class down forever. we should recall and impeach all of the lawmakers and try them for treason against our country and the people.
10-12-2009 @ 11:34AM
Gary said...
You naysayers keep hanging on to your negative gloom and doom, while we pick up the pieces and move on. I guess we'll have to drag you along. All the numbers are looking better, unemployment is even better than original forecasts and won't hit the 10.8% as we did during the Reagan years. We will recover, we always do. You could be in a soup line instead of banging away on your internet connected computer, but there you are.
10-12-2009 @ 11:39AM
david said...
Okay, so I'm an idiot. Can someone explain to me please how this math works?
Fourth quarter results show 2 billion dollars...yearly bonuses are 20 billion dollars...the math does not make any sense.
And can someone tell me how a company NEEDS billions in bail-out money, yet in 1 year is in a position to gift 20 billion dollars.
Doesn't something stink here?
10-12-2009 @ 12:30PM
Sandy said...
Goldman Sachs should be nationalized!
10-12-2009 @ 12:47PM
Edward said...
Tax their bonuses to the fullest !
10-12-2009 @ 1:01PM
Dave Wallace said...
And of course, we should not be at all concerned that our current Treasury Secretary has deep ties from the past to Goldman Sachs. I guess it is just a coincidence that Goldman Sachs got bailout money and their primary competitors were allowed to sink.
10-12-2009 @ 2:45PM
tom said...
With third quarter earnings expected to ring in at more than $2 billion, Goldman is prepared to pay out some hefty bonuses. The problem? Given that Goldman Sachs received a taxpayer bailout only a year ago, paying out massive cash bonuses now could lead to a significant public relations backlash.
YEA, THE BRAIN DEAD LEADERS OF THIS COMPLANY ARE JUST THAT - BRAIN DEAD.
HOW ABOUT PAY BACK WHAT THEY STOLE FROM THE TAXPAYERS ? HOW ABOUT SAVE THESE FUNDS FOR NEXT TIME THE EMBEZZLERS TRY AND BREAK THE COUNTRY ? HOW ABOUT HIRING THOSE IN NEED OF A JOB RATHER THEN FILL THE POCKETS OF THE CROOKED BUMS WHO RUN THIS COMPANY, BNAKS AND STOCK MARKET ?
PEOPLE NEEDS JOBS- NOT MORE CROOKS
10-12-2009 @ 6:25PM
servicemasterwv said...
oh good they can pay us the taxpayers back now before putting money in thier pockets or in othe words stealing it