Bonus rumour "beggars belief"

Bonus rumour "beggars belief"

The Investment bank Goldman Sachs is facing a storm of criticism over reports its chief executive could pocket a bonus of up to $100m.

Officials at Goldman Sachs say no decision has been made yet on how much compensation will be paid to its CEO after a year of record profits.
 
The rumour, however, that Lloyd Blankfein might get a bonus of as much as $100m first surfaced last week at the annual shindig of the great and the good in global economics and business at Davos, Switzerland.
 
Goldman Sachs is sensitive to criticism about how much it pays staff.
 
All its London-based partners have agreed to limit their pay to £1 million (about $150m) after a levy was imposed on them by the UK government.
 
Last month Goldman announced that only 35.8 per cent of its revenue for 2009 would be paid out to staff, down from 48 per cent in 2008.
 
The average Goldman employee still got $498,246 in pay last year - though that's down from $661,490 in 2007.
 
But many far less senior bankers - the ones who actually cut the deals that Goldman books as profits - could receive a great deal more ... and that includes CEO Blankfein.
 
He was paid a bonus of almost $70m in 2007 but in common with heads of other Wall Street banks he gave up his bonus in 2008.
 
However, in 2009 Goldman’s profits were $1.8bn higher than in 2007 ... and that's leading to speculation of a bonus bonanza for Lloyd Blankfein.
 
In a statement to Al Jazeera Goldman Sachs pushed back at rumours its CEO is in line for $100m pay day.
 
Spokesman Lucas van Praag said:
 
"Although the board has yet to determine executive compensation, given everything we have said and done on the subject, the idea that the directors would award Lloyd Blankfein $100m, or anything close to it, beggars belief.  There's speculation, and there is stupidity. This speculation transcends the simply stupid and takes it to an entirely new level."
 
The Goldman Sachs rumour comes as President Obama met voters in New Hampshire on Tuesday as part of his "White House to Main Street" tour after the State of the Union address.
 
In the past he has described bonuses paid out by some banks as “shameful”.
 
To be fair to them, Goldman Sachs has paid back the bank bailout money it received at the height of the financial crisis ... so in theory it's free to pay its executives what it wants.
 
But Goldman's 2009 profits were built on the back of virtually interest free loans from the US treasury department which has also taken on many Goldman's staff over the years.
 
So rumours that Goldman's CEO could be going home with $100m will do little to restore the firm's image in the eyes of ordinary Americans still struggling in the wake of the deepest recession for 60 years.