Every time Goldman Sachs waddles out a policy meant to assuage public criticism of their morally bankrupt behavior, they only expose their inherent inability to understand the scope of the animus that has been generated. The NY Times has an article outlining that Goldman Sachs top executives will forgo direct cash bonuses for deferred stock options that are contingent on the overall performance of the bank over the period of the next five years.
In 2007, [GS's CEO Lloyd Blankfein] was paid about $67.5 million, a Wall Street record. This year, he and 29 other top executives will receive bonuses that would be quite large, but they will be in the form of what Goldman called “shares at risk,” or stock that cannot be sold for five years and can be retracted if the executive does something that hurts the firm. Goldman has long paid a portion of bonuses in stock.
All this is just public relations, because for the majority of those engaged in Goldman Sachs casino capitalism scam, the winning never stops. For example, the majority of the investment bank's employees will still receive their record-sized bonuses this year, with the average employee receiving $700,000 USD. Despite the company being literally saved by the taxpayer, the crooks at GS will continue to for years to come, to hand out half of their profit to the grinning fiends on Goldman's payroll. To the general public shareholder they have said, "It would give [them] a say in determining compensation." However, any such vote will not be binding! Imagine that you tell your employee that he's not entitled to a bonus and he pats you on the head and says, "Thanks for your opinion, but if I want it I'll tell you what to say!"
To be fair, Goldman Sachs is not alone in this egregious behavior. Many of the largest entities that took TARP funds are rushing to repay their loans, so that the government will no longer be given the legal option of limiting executive compensation packages. Bank of America and Citibank have officially said they are moving in this direction. Given the extraordinary amounts secretly given to all these banks by the FED, it is impossible to determine how much money has actually been transferred between the government and Wall Street; however.
On the point of executive compensation in general, I have to say to those who bemoan that they have to pay these bankers massive salaries to preserve talent, you're a fool. First, if you blow up the global economy and push your company into defacto bankruptcy you should be fired. Investing is a zero-sum game. Making a bundle through casino-capitalism means someone else got screwed. In the recent Wall St. fiasco that 'someone' was everyday people and general investors who saw their 401K's disintegrate, their retirement funds nuked, and the value of their homes fall off the cliff. Furthermore, those same people who saw their personal wealth vanish, were forced to incur further debt by accepting government backed bailouts of the bankers who caused the mess in the first place.
To be fair, Goldman Sachs is not alone in this egregious behavior. Many of the largest entities that took TARP funds are rushing to repay their loans, so that the government will no longer be given the legal option of limiting executive compensation packages. Bank of America and Citibank have officially said they are moving in this direction. Given the extraordinary amounts secretly given to all these banks by the FED, it is impossible to determine how much money has actually been transferred between the government and Wall Street; however.
On the point of executive compensation in general, I have to say to those who bemoan that they have to pay these bankers massive salaries to preserve talent, you're a fool. First, if you blow up the global economy and push your company into defacto bankruptcy you should be fired. Investing is a zero-sum game. Making a bundle through casino-capitalism means someone else got screwed. In the recent Wall St. fiasco that 'someone' was everyday people and general investors who saw their 401K's disintegrate, their retirement funds nuked, and the value of their homes fall off the cliff. Furthermore, those same people who saw their personal wealth vanish, were forced to incur further debt by accepting government backed bailouts of the bankers who caused the mess in the first place.
Secondly, the executives of these companies aren't the company and they should not be treated as if they and they alone have the exclusive expertise and talent to meet shareholders demands. What should be evident, is Goldman's institutional influence within the shadowy halls of government, the offices of bank regulators, and in the boardrooms of multinationals is the primary reason why they have succeeded. Individuals, even CEO's, do not have this clout or ability, so why compensate them for what they do not possess? Recent history has shown that many executives who have left Goldman Sachs for other companies or other professions have fallen flat on their faces. Former GS CEO Robert Rubin's performance at Citibank should be recognized as a total catastrophe for shareholders of that company and Jon Corizine's (another GS CEO) single term as governor of NJ was so uninspiring, the citizens of the state decided they'd rather have a Republican running the state a mere ten months after Dubya left the White House.
No comments:
Post a Comment