With GS raking in record net income and compensation, the shareholders believe that the benefits should be shared among them rather than in compensation and benefit for the employees. The shareholders are also concerned about a minute change in the firm's financial statements regarding how the company counts the number of employees.
Apparently, these changes increase the company's number of employees by adding temporary employees and consultants. Adding these to the company's employee roster, makes it look like the company's employees make less than they do. Thanks to this new counting practice, GS's employees earned $717,000 apiece in 2009 (coincidentally, where do I send a resume GS?). Excluding temporary employees and consultants per-employee compensation is roughly $775,000. GS insists that it hasn't adjusted the numbers. GS says it always included temporary employees and consultants, but they weren't counted in employee totals.
The bottom line is that shareholders want more of the money that the company makes, and the company does not want to share. Some have suggested rewarding shareholders with a one-time dividend rather than buying back shares, but this scenario is unlikely. What is interesting is that these shareholders, who usually shy away from debate over Wall Street pay, are now delving into the issue.
What do you think? Should the shareholders be rewarded for sticking with the company? Or should the executives be rewarded for pulling in record net income and compensation in the midst of the current financial crisis? I think that shareholders deserve a bit of the payout. They stuck with the company rather than bailing ship at the first sign of trouble (and there have been plenty of those). Reward them for their loyalty.