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No Bonuses for Top Goldman Executives

Posted by: Jena McGregor on November 17, 2008

Much has been made today of the news that Goldman Sachs’ top seven executives, including CEO Lloyd Blankfein, are giving up their bonuses for 2008. According to a story in today’s Wall Street Journal, the move follows “months of internal debate” at the Wall Street firm, and now that Goldman has acted, other firms on “Lloyd watch” will follow suit. Indeed, Swiss bank UBS has already done so, axing bonuses for its executive board members. The WSJ’s DealJournal blog referred to the bonus cut as “The Neutron Bomb of Wall Street.”

But really, how much debate was there? Would Blankfein really have ever gotten a hefty bonus in such a tumultuous year? Sure, $68.5 million—the total size of Blankfein’s enormous package last year—was a lot to consider giving up. But with the uproar over bankers’ pay at a fever pitch, did they really ever consider paying those bonuses?

More telling, if less substantial, is that some companies outside the maelstrom of the financial crisis have been trimming top executives’ salaries and slashing bonuses. Earlier this year, JetBlue Airways CEO Dave Barger and Continental Airlines chief Larry Kellner cut their salaries; Kellner also relinquished his bonus. Executive compensation consulting firm Equilar searched its database for BusinessWeek and turned up several recent examples of CEOs far from the bailout’s epicenter whose pay had been trimmed, including Gannett’s chief, who is taking a 17% pay cut. NVIDIA’s board accepted a management proposal (because these are always proposed by management, of course) to do away with cash incentives. Even directors’ pay is getting cut. At RV maker Thor Industries, each of the non-employee directors is forgoing 15% of pay “due to the decline in the Company’s profits in fiscal 2008.”

When companies are laying off workers, as Goldman and many of the other banks are doing, many acknowledge it’s a best practice for CEOs to share in the pain somehow. When that firm is also receiving government bailout funds, cutting top executive bonuses should be an obvious practice. And one that doesn’t need a lot of debate.

Reader Comments

Wally Bock

November 17, 2008 3:44 PM

"Best practice?" More like the right thing. You can't talk teamwork and "we're all in this together" during good times and then have your frontline troops be the only ones giving up pay


November 17, 2008 6:50 PM

How will all of these Top Executives be able to maintain their mansions in West Palm Beach, Florida???? QUOTE: "The highest concentration of the wealthiest individuals in the world reside in West Palm Beach, Florida between the months of November and March." - Harvard Business Professor. To read that, and OTHER things he said, simply 'Google' this- RIP OFF REPORT FUEL FREEDOM INTERNATIONAL MPG CAPS, and go to the 2001 Toyota Tacoma Ripoff Report, and then to the 'Update' entitled- "Blame it on a Lawyer". Go Harvard!!!!! Go BusinessWeek!!!!!


November 17, 2008 6:57 PM

WOW!!!! Goldman's stock has really PLUNGED in the past year, hasn't it???? From about $240 a share to aroud $66 or so, huh? Hey 66!! Add one more and you get 666, right? 6-6-6!!! Isn't that the sign of something?????


November 17, 2008 7:01 PM

This is 100% TRUE!!! Goldman's HIGH today was $66.33, Monday November 17th 2008!!!!! Look at the 1st & 2nd numbers, then ADD the next two!!! "666"

Joe Blow

November 17, 2008 7:21 PM

It seems to me: No executive or anyone else within a company that is receiving or about to receive a bailout from the taxpayers are eligible to receive ANY bonuses, and if the bailout is accepted by the complaining company, then they must set up a payment schedule to the US government to pay back the bailout, with interest, as their profits climb! Anything less is big business screwing the labor force.

Carl Phipps

November 17, 2008 7:24 PM

It's about time companies stood up, did the right thing and not take the mega-bucks in bonuses. Someone finally has some morale’s. Hopefully other CEO's and executives will develop some ethics.


November 17, 2008 7:25 PM

Oh my god, you're right! Check this out!
$66.33 + 11 / 17 - 0.2008

and then subtract 0.24 for what the price used to be and it rounds up to 66.6!!! 666!!!!! omg omg omg! Idiot.


November 17, 2008 7:29 PM

What is telling about this story is that the initiative came from management and not the Board. Of course, if I were receiving over $300,000 plus expenses for about 30 days work, I would be sure not make any waves like actually governing.


November 17, 2008 7:34 PM

Breaks my heart.....I was forced to take a 10% salary cut in 2000 and I'm finally APPROACHING recouping that loss of annual income. Then the economy goes down the toilet, my Wife loses her job and we're forced to clean out our retirement funds to save our home. Gee.....I'll bet they're suffering!


November 17, 2008 7:40 PM

This is total bullshit. CEO pay is irrelevant to the public. Companies have the right to pay their employees whatever they want. They are not government agencies.

I'm a normal working individual, but IMO, companies that wanted to give their CEOs bonuses should have told the naysayers to screw off, and done what they wanted. It's the business of the company and the shareholders.

The Devil

November 17, 2008 7:46 PM

Oh man you caught me, I am using Goldman's share price to signify my rise to the throne of all that is and ever was... muaahahaha.

On a side note... when did bonuses change from being something you got when you outperformed expectations to something you get because you showed up... isn't that called base pay? I know I don't get a bazillion % bonus at the end of the year for showing up, I get told that I need to show more initiative.


November 17, 2008 7:53 PM

Sharpening my vintage French Revolution guillotine.

Jena McGregor

November 17, 2008 8:32 PM

"The Devil" makes a great point. Bonuses should only be paid out for outperformance. And one can hardly argue that that happened this year.


November 17, 2008 8:49 PM

Too bad these crooks were already paid billions in bonuses over the past few years for phantom "profits" that evaporated overnight and are now staggering losses that have crippled the world economy.

No bonuses this year? That's hardly news. I guess they'll have to lean back on that 50 million they got last year and cut back on the xmas gifts for their kids, wives, and mistresses!


November 17, 2008 9:11 PM



November 17, 2008 9:39 PM

Too bad, so sad for Lloyd's bonus. He received many millions last year and my bonus was only $200. The worst part of it is, we work for the same company. Who do you really think worked harder??


November 17, 2008 10:41 PM

From $240 the value of Goldman's shares dropped to $66 or 72.5%. Isn't pay based on performance? Why not pay cuts equivalent to the devaluation of the shares?


November 17, 2008 10:46 PM

Let's see, the top three guys at GS got approx $69m in bonuses last year. Now their company is begging the govt for money, taking the money and these saints are foregoing their bonuses. They ought to work for free for the next ten years. That would equal $6.9m per year out of their last year's bonus. And don't forget Pandit. He takes gov't money and then he lays off 53,000. He should be investigated for insider trading. Remember last week he bought 8mm shares of Citi. This week he announces a huge layoff. Usually a layoff results in a stock price increase. I bet he is scratching his head wondering why the stock price didn't go up. Where are the real men? Who have the balls to roll up their sleeves and give a day of work for a day of pay?

Hilary Smth

November 17, 2008 10:55 PM

Executives are giving up their bonuses in order to preempt legislation curtailing executive compensation. We need legislation that ties executive compensation to employee compensation. For example, "executive compensation must be no greater than 50 times the compensation of the lowest paid company employee." This way executive pay could increase but only if the pay of the lowliest worker also increased. This type of legislation could potentially stave off the looming labor movement corporate America is facing.


November 17, 2008 11:04 PM

Quote from Veritas:
"Where are the real men? Who have the balls to roll up their sleeves and give a day of work for a day of pay?"

They are all the employees, that are being laid off!


November 17, 2008 11:08 PM

Bonuses?? These people should be in jail for misstating what there company’s worth was. After Enron the US government implemented SOX a set of laws and penalties for companies to abide by Goldman Sacs breached these laws and as such should be in jail, so why are we discussing bonuses, when we should by LAW be discussing prison terms


November 17, 2008 11:22 PM

An outsider's view:
America's strength is strong enforcement of well thought out laws. I agree with Korbas, pay scales of a non government company are the responsibility of that company. That is how America has grown. If GS is taking government money to bail itself out or restructure itself as a non-investment bank, then the US government has to have regulation to monitor it. The monitoring may not include executive pay. If this baying for blood continues, America will be no different than other communist/socialist/third world countries. You will regret it. America is the home of risk takers and of strong laws and better enforcement. For the sake of the world don't change the US.

richard r.

November 17, 2008 11:53 PM

This is for Korbas!...It's true these companies may not be government agencies but usually a business runs on the efforts of the lower level employees,they are the backbone of most companies. I understand that these CEO's come up with the budgets and the plans for the company's success but every company always promotes the concept of "team" effort. If these companies do stand for the concept of team, then the CEO's and upper level employees should take a pay cut and give up their bonuses especially if it affects the employees that are being let go due to the economic downturn. As for the public it is their concern because the public supports these companies in the business world and the "public" also includes the lower level employees that are getting laid off. SO IT'S NOT TOTAL BULLSHIT! IDIOT!


November 17, 2008 11:57 PM

As Leaders of the Financial Market, i don't think they had any other option but to give up their bonuses.
Isn't it true that " They earn what they spend, while we spend what we earn?"


November 18, 2008 12:32 AM

karl, china's interest rate is at 6.66%.


November 18, 2008 1:46 AM

I hate to play devils advocate, but what incentive is there for a CEO like Steve Jobs, to take a pay cut and still work. I have to admit though, that sports teams have the right mentality... Give the people who do all the work,The Players, Multi-Million $ salaries, while the Mangers get paid, well you get the point.

So I suggest that let the execs keep their Pimpish-like salaries while the workers get paid like Ho's. Why you ask? Its because one day I would like to become CEO of a company and get paid as if im pimping (ho's) on the street and live in West Palm Beach while my b!tches do all the work!

Fed Up

November 18, 2008 9:33 AM

"Gannett's CEO (Craig DuBow) cut his salary 17%." Talk about a drop in the bucket. He didn't cut his multi-million dollar bonus -- the larger part of his total annual compensation--a penny. The company is at the brink of failure. Employee layoffs are happening by the thousands and the stock has dropped from more than $80 to $7.50 in the past few years. He deserves a bonus, for sure. Where are these so-called Directors that are supposed to be overseeing corporate operations?


November 18, 2008 12:09 PM

Isn't the whole system rather self-serving? Aren't most board members ceo's themselves or ceo wanna-be's? Raising compensation of others makes them appear to be more valuable; and around and around it goes. I never could understand the "I have to have it all" mentality. Aren't these people hired to strengthen their companies, to make them more profitable, to set an example through hard work and fair play, and to provide fair compensation and benefits for all their workers. Trickle-down? What a joke!

No Name

March 23, 2009 7:05 PM


You are wrong. We do not need any legislation regulating executive pay... we live in America, you know, land of the FREE. If the company is receiving federal bail out money, then yes, strings should be attached to the money. However, if a company is not receiving any bail out money then nothing should be done to limit pay for any management.

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