Bloomberg News

Goldman Said to Boost Blankfein’s Bonus 11% to $21 Million (1)

January 30, 2014

Goldman Sachs Group Inc. (GS:US) Chief Executive Officer Lloyd C. Blankfein, the highest-paid head of a U.S. bank for 2012, saw his bonus increase 11 percent to $21 million for his work last year.

Blankfein, who also serves as chairman, received 88,422 restricted shares on Jan. 28 valued at $14.7 million, according to a regulatory filing. He also got a cash award amounting to the typical 30 percent of his total bonus, according to a person with knowledge of the payout. On that basis, the cash portion of his bonus would be about $6.3 million.

JPMorgan Chase & Co. (JPM:US) and Morgan Stanley (MS:US) boosted stock awards for their CEOs this month after an improving U.S. economy drove up bank shares in 2013. Goldman Sachs had an 11 percent return on equity last year, topping its largest Wall Street rivals, while cutting pay costs amid revenue that was little changed. The stock jumped 39 percent in the year, more than the 33 percent climb in the S&P 500 Financials Index.

Blankfein’s bonus and $2 million salary amount to $3 million more than what JPMorgan paid CEO Jamie Dimon. It was the second straight year that Blankfein out-earned his rival. Blankfein also got a $5 million long-term incentive a year ago tied to performance targets. Details of any 2014 long-term incentive will be disclosed later this year.

Analysts’ Views

Including the long-term incentive, Blankfein’s total compensation a year ago amounted to $26 million. The package was his biggest since he set a Wall Street pay record of $68.5 million in 2007, his first full year as CEO. He took no bonus for 2008 after the financial crisis hit.

Wells Fargo & Co., where CEO John Stumpf was second to Blankfein on 2012 pay, hasn’t yet reported this year’s payout.

Blankfein, 59, is getting shares favored by less than a quarter of the Wall Street analysts who track Goldman Sachs. Eight analysts say the stock is a buy, 22 call it a hold and four give it a sell rating, according to data compiled by Bloomberg. Restricted shares typically have been the largest component of the CEO’s pay since the financial crisis.

Chief Financial Officer Harvey Schwartz and President Gary D. Cohn each received restricted shares worth about $13.4 million, according to separate filings today. Vice Chairmen Mark Schwartz and John S. Weinberg each got shares valued at about $10.8 million, while Vice Chairman Michael Sherwood got about $19.2 million.

Dimon’s Raise

James A. Johnson, the former head of Fannie Mae and the longest serving member of Goldman Sachs’s board, leads the compensation committee. The New York-based company won approval from 87 percent of shareholders for its compensation plan at the last annual meeting in May.

Blankfein said in November that his firm, the U.S. bank most reliant on trading, can boost returns without a major strategic change and remains poised to benefit when global growth picks up. Goldman Sachs allocated 37 percent of revenue for compensation last year, the second-lowest figure as a public company, helping it boost net income by 8 percent.

JPMorgan, the largest U.S. bank, boosted Dimon’s total pay 74 percent to $20 million, including $18.5 million in restricted stock. The board said it took into account long-term performance in addition to the mounting legal costs that broke the New York-based firm’s string of record profits. Pay for Dimon, 57, was highest in 2007 at $49.9 million, including special stock awards.

Morgan Stanley, the sixth-largest U.S. bank by assets, paid 55-year-old Chairman and CEO James Gorman $5.1 million in stock for 2013, almost double his award a year earlier. The New York-based firm hasn’t yet disclosed his cash bonus and long-term incentives.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net


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Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $177.84 USD
    • 0.93
    • 0.52%
  • JPM
    (JPMorgan Chase & Co)
    • $56.63 USD
    • 0.43
    • 0.76%
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