By Christine Harper - Apr 14, 2012 12:51 AM GMT+0700
Goldman Sachs Group Inc. (GS) awarded Chairman and Chief Executive Officer Lloyd C. Blankfein $12.4 million in compensation for 2011, down 35 percent from a year earlier, as the firm’s profit and stock fell.
Blankfein’s pay included a $3 million cash bonus, $7 million in restricted stock, $2 million in salary and $449,600 in other benefits, according to a proxy statement today from the New York-based firm. Last year it granted him $19.1 million, including $5.4 million in cash, $12.6 million in restricted stock, a $600,000 salary and $464,100 in benefits for 2010.
Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc., in Washington. Photographer: Joshua Roberts /Bloomberg
Goldman Sachs, the fifth-biggest U.S. bank by assets, set Blankfein’s compensation after earnings dropped 47 percent, the stock tumbled 46 percent and the firm eliminated 2,400 jobs. His pay compared with a $10.5 million package awarded to Morgan Stanley (MS) Chairman and CEO James Gorman, $15 million granted to Citigroup Inc. (C) CEO Vikram Pandit and $23 million for JPMorgan Chase & Co. (JPM) Chairman and CEO Jamie Dimon.
“That decrease from the prior year is pretty consistent with what we’ve seen in the industry,” said Joseph Sorrentino, a managing director at Steven Hall & Partners, a compensation- consulting firm in New York. “The tracking of the stock price to the payout may not always line up, but it should over the long term.”
‘Engaged’ Shareholders
Goldman Sachs’s compensation committee, which decides how much to pay top executives, has been led by James A. Johnson, a former CEO of Fannie Mae (FNMA), as long as Goldman Sachs has been a public company. At last year’s annual meeting, about 73 percent of shareholders voted in support of the board’s executive compensation decisions, down from 96 percent a year earlier.
“We engaged with many of our shareholders in advance of and following our 2011 annual meeting of shareholders in order to gain further insight and understanding into their views on our executive-compensation program, particularly as expressed through the advisory vote,” according to the proxy.
As a result, the board decided to cut each named executive officer’s annual variable compensation by about 44 percent “because of our decline in performance in 2011,” according to the proxy.
While pay is up from 2008, when Blankfein, 57, and six other senior officers were awarded no bonuses, it remains below his record-setting $67.9 million compensation package for 2007.
Viniar, Cohn
The firm spent $258,700 on security for Blankfein last year, or almost double the amount paid a year earlier. Goldman Sachs, which said costs are justified by the “elevated threat profile of the current environment,” was among Wall Street firms targeted by Occupy Wall Street protests.
Chief Financial Officer David A. Viniar, 56, President and Chief Operating Officer Gary D. Cohn, 51, Vice Chairmen J. Michael Evans, 54, and John S. Weinberg, 55, were each awarded $11.85 million, plus benefits. The value of their benefits ranged from $185,500 for Evans to $242,700 for Cohn, according to the filing.
Like Blankfein, their awards included $3 million cash bonuses and $7 million in restricted stock.
The firm disclosed in January 2011 that Blankfein’s salary would increase to $2 million in 2011 from $600,000 previously and that Cohn, Viniar, Evans and Weinberg get salaries of $1.85 million apiece. Each of them had received $600,000 salaries since 1999, the year the firm became a public company.
SEC’s Method
Blankfein and 10 deputies reaped a total of $107.8 million during 2011 from their investments in private equity and hedge funds managed by the firm, according to the proxy. That compared with $129.1 million paid out to Blankfein and eight deputies in 2010.
Blankfein’s payments, which included profits, any return of capital and a share in the so-called overrides the firm receives for managing the funds, totaled $22.2 million, down from $27.2 million in 2010, according to the proxy.
As of March 26, Blankfein owned 3.15 million shares in Goldman Sachs, according to the proxy. That stock was worth $380 million based on yesterday’s closing price of $120.39. Cohn owned 1.83 million shares, the proxy disclosed, worth $221 million at yesterday’s closing price.
Goldman Sachs slid $4.37, or 3.6 percent, to $116.02 at 1:15 p.m. in New York.
Board Recommendations
The board has recommended investors vote against all three shareholder proposals that are up for consideration at this year’s annual meeting, according to the proxy. One calls on the board to require each of the executives named in the proxy to retain the shares they receive as compensation for at least three years after they leave the firm.
The Securities and Exchange Commission requires that the company’s proxy disclose how much compensation executives received during the fiscal year. Under that methodology, which includes awards received during 2011 for performance in prior years, Blankfein received a total of $16.2 million in compensation, up from $14.1 million in 2010.
The firm is set to hold its annual shareholder meeting at 9:30 a.m. on May 24 at its office in Jersey City, New Jersey, according to the proxy.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
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