Feinberg Says He Spoke With Blankfein About Pay Plans (Update2)
February 08, 2010, 4:44 PM EST(Adds Goldman Sachs spokesman in the seventh paragraph.)
By Ian Katz and Betty Liu
Feb. 8 (Bloomberg) -- Kenneth Feinberg, the U.S. special master on executive compensation, said Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein consulted with him on the firm’s pay plans and adopted his “prescriptions.”
Feinberg and Blankfein spoke “about how Goldman as an institution should approach base salaries and compensation over time,” Feinberg said today in a Bloomberg Television interview. “To a large extent I think he has succeeded in adopting the prescriptions we laid out.”
Goldman Sachs, whose shares doubled last year as profit soared to an all-time high, awarded Blankfein, 55, an all-stock bonus for 2009, according to a Feb. 5 filing with the U.S. Securities and Exchange Commission. Blankfein’s payment of 58,381 restricted stock units, valued at $9 million at the Feb. 5 closing price of $154.16, falls short of the Wall Street record $67.9 million he received in 2007.
Feinberg, who has no formal authority over Goldman Sachs compensation, in October ordered pay cuts averaging 50 percent for the top 25 executives at Citigroup Inc., Bank of America Corp. and five other firms that took U.S. bailout money. The two banks repaid the funds in December, enabling them to leave his supervision. Feinberg now oversees pay packages for executives of American International Group Inc., Chrysler Group LLC, Chrysler Financial Corp., General Motors Co. and GMAC Inc.
Goldman Sachs’s decision to pay executives with long-term stock awards whose value will hinge on the company’s performance was a positive step, Feinberg said. Overall compensation at firms outside his watch remains too high, he said.
“Yes, I think it is,” Feinberg said when asked whether the $9 million given to Blankfein was excessive. “I don’t believe there are more than one or two” making as much among the 700 executives under his jurisdiction, he said.
Goldman Sachs spokesman Ed Canaday declined to comment.
Feinberg said he wasn’t consulted on pay for John Thain, the former Merrill Lynch & Co. CEO who was named chairman and CEO yesterday of CIT Group Inc., the commercial lender that emerged from bankruptcy in December.
--With assistance from Christine Harper and Michael Moore in New York. Editors: Gregory Mott, Steve Dickson
To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net; Betty Liu in New York at bliu17@bloomberg.net.
To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.
