It’s hard to say that things have really changed on Wall Street when a bad year for Goldman Sachs (GS) results in CEO Lloyd Blankfein receiving a total compensation of $18.6 million.
In an article on Street Sweep, Colin Barr reported about the compensation package, which Goldman reported in its annual proxy statement filed on Friday, April 1.
According to the document, Blankfein and each of his top four deputies received an identical compensation package. Each man received a $600,000 salary and a $5.4 million cash bonus.
“Our performance over the last three-year period was strong, particularly in relation to our core competitors: Bank of America Corporation (BAC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS),” Goldman said. “While our performance in 2010 was not as strong as in 2009 due to difficult market conditions for much of the year, we continued to create value for our shareholders and prudently manage our firm from a risk perspective.”
In 2009, the same executives received a total compensation package totaling $9.6 million.
In a year that saw profits fall over 30% and a flat stock, it’s a head-scratching package. However, a report issued by Goldman in January shows that the compensation structure will be changing, starting this year.
In January, Goldman announced it would raise its top executives’ base salaries in order to reduce their focus on incentives.
Regulators led by the Federal Reserve are now pushing for higher salaries and lower, stretched-out bonuses in a bid to discourage the banks from gambling for huge short-term rewards, as they did so disastrously during the housing bubble that ended with the meltdown of 2008.
The idea is to limit the payment of giant, one-time bonuses that later turn out to have been based on fictitious profits, as was seen at places like Merrill Lynch during the bubble. Federal regulators issued 47 pages of guidance last June laying out the rules banks must follow in setting bonuses. They didn’t issue any guidance on salaries.
“Banking organizations are responsible for ensuring that their incentive compensation arrangements do not encourage imprudent risk-taking behavior and are consistent with the safety and soundness of the organization,” the document said.
It is too early to say whether or not that will be the case. However what is indisputable is that even with the raises, Goldman’s 2011 payouts stand to be just a fraction of the go-go days, when Blankfein and company could receive $40 million or more in bonuses and stock awards in a given year.
The other top executives are President Gary Cohn, finance chief David Viniar and vice chairmen Michael Evans and John Weinberg.
Goldman Sachs stock closed up over 1% on Friday at 160.23. For the year, the stock is down 4.72%.
