Seven top executives of Goldman Sachs Group Inc. have asked to forego bonuses for 2008, and the big Swiss bank UBS said its highest-ranking managers also would have to settle for only their salaries this year.
The banks announced the moves after interest groups and some member of Congress raised questions about the propriety of Goldman Sachs and other companies paying billions in year-end bonuses after taking financial aid from the government.
Goldman Sachs got $10 billion in taxpayer money from the Treasury Department last month as part of the government's plan to inject capital into
Although the company's chief executive, Lloyd C. Blankfein, won't be getting a bonus on top of his $600,000 base salary, he should have little trouble making ends meet. His combined salary and cash bonuses for the past four years totaled $90 million.
Goldman Sachs' co-presidents, Gary D. Cohn and Jon Winkelried, each had $54 million in combined salary and cash bonuses over the two previous years, according to the company's SEC filings.
Goldman Sachs has been one of Wall Street's strongest performers in recent years, and its compensation levels have reflected that success. However, its profits for the first nine months of 2008 were off 70 percent from the same period last year.
UBS said that, in addition to eliminating executive bonuses this year, it was adopting a new compensation scheme. According to a summary, the company is changing to a long-term model in which variable compensation such as bonuses will depend on sustained performance.
UBS said a substantial portion of the bonuses will not be paid immediately, but will be held by the company and remain at risk, subject to future results.
"As Citigroup suffers, so too do investors, employees, and taxpayers,'' Cuomo said in a prepared statement. "At the very least, Citigroup should follow Goldman Sachs' lead and announce quickly that top executives will not be receiving bonuses this year. Citigroup's stated intention to wait until the new year to make its bonus decisions is a mistake. After four consecutive quarterly losses, it seems only fair that top executives should shoulder their fair share of these difficult economic times.''
Citigroup got $25 billion in funding from the Treasury Department last month.
Much needed web page.
Can we get some interest in punishment for those polititions that knew about the pending financial debacle and did nothing to warn us? And infact stated multiple times that everything was ok in these institutions? These same politicions received money from the now failed Freddie and Fannie. One even had a boyfriend (Lover?)in Freddie Mac while he was head of the finance committee. (and he is still the head of the finance committee)
Two that come to mind are Barney Franks and Lou Dodd? These people represent all that is bad in our "representative" government.
Punishment of a politician is rare, so don't count on it. Also, you give too much credit to our elected officials. The experts in the Federal Reserve (Greenspan and Bernanke) did not even recognize that bubbles existed...and Bernanke/Paulson were clueless about what was going on in the economy. In that regard, the Fed and our politicians were (are) miserable failures. However, Bernanke/Paulson knew the system had to be salvaged...and they are still trying to plug up the holes. But I digress.....For those of you who care, following is an updated list of banks who have sold preferred stock to the government.
http://www.treasury.gov/initiatives/eesa/docs/TransactionReport-11172008.pdf