After months of internal debate at Goldman, the seven top executives at the firm, including Chief Executive Officer Lloyd Blankfein, asked the board’s compensation committee to grant them no bonuses. The board approved the request on Sunday.
The executives will only be eligible for their base salaries, $600,000 for each. A firm spokesman said the executives felt it was “the right thing” to do.
So says an article from the Wall Street Journal: Goldman Execs give up bonuses
I want to ask a different question than the article is answering. My question is why would you own a stock where earnings are made up at of thin air, executives get bonuses no matter what the results of the company is, and execs reluctantly give up bonuses despite the stock being down 70%.
The problem here is not the executives. The problem is the institutional shareholders and investors who let this compensation go on. Its one thing to make an investment where your stock goes down and you make a mistake. It is quite another thing when you are investing in a company that is screwing shareholders and you just ignored it. If anyone of the following firms were managing my money I would pull my money and terminate the relationship:
Barclays Global Investors UK Holdings Ltd
MARSICO CAPITAL MANAGEMENT, LLC
STATE STREET CORPORATION
VANGUARD GROUP, INC. (THE)
WELLINGTON MANAGEMENT COMPANY, LLP
JANUS CAPITAL MANAGEMENT, LLC
PRICE (T.ROWE) ASSOCIATES INC
Bank of New York Mellon Corporation
These firms are the top holders of Goldman Sachs. I would do this because if they aren’t worried about executives giving themselves egregious and undeserved bonuses and salaries, they are probably not good stewards of your money and are probably charging you an arm and a leg for their services. And if you own these firms yourself, I would recommend you read the following book: