Goldman Sachs Sued by Shareholders for Breaking Own Rules on Executive Pay

Monday, January 11, 2010

Ken Brown, a shareholder of Goldman Sachs, claims the firm is supposed to spend about 50% of its net revenue on salaries and bonuses. But in 2008 Goldman dished out $4.82 billion in bonuses despite earnings of only $2.32 billion..In the first quarter of 2009, it spent 259% of its net income on employee and executive compensation and in the second quarter 193%. Brown is now suing Goldman for exceeding its own rules on salaries and bonuses.

 
The lawsuit does not cover Goldman’s bonuses for all of 2009, which have yet to be publicly revealed. Bloomberg reported last year that the firm’s compensation during the first nine months were $16.7 billion, but other estimates put the figure at more like $22 billion for the entire year, which would be a record for the company.
 
The Central Laborers’ Pension Fund of Illinois has filed a similar suit against Goldman Sachs.
-Noel Brinkerhoff
 
Goldman Sachs Directors Bled the Bank Dry, Shareholder Says (by Barbara Leonard, Courthouse News Service)
Lawsuit Against Goldman Sachs (New York Supreme Court) (pdf)

Comments

Evan Ravitz 15 years ago
To what extent are the bonuses "hush money" to keep insiders from blowing the whistle on the grand theft The Goldman Suckers are perpetrating??
MontgomeryScott 15 years ago
Keep up the good reporting, AllGov! Bear in mind, suing Goldman et.al. is O.K., on the face of the issue, BUT: Goldman/Sachs will recoup the losses (if any) by making their debtors, present and future, pay higher interest rates...and, no doubt, already has a scheme to get a TAX BREAK due to the losses (if any) from their 'bottom line'... It is similar to suing a government agency. The TAXPAYERS always pay in the end! HOPEFULLY, the EXECUTIVES that received these bonuses, along with the Board of Directors that authorized them, are SPECIFICALLY NAMED in the suit. It probably makes no difference, however, as; NO DOUBT the lawyers at Goldman are (in all honesty) friends with the majority of the judges who might get this case, having been introduced on the golf course, the sauna room, or perhaps at the fraternity at their respective colleges... They are not going to allow the mere SHAREHOLDERS to prevail, and even if this case proceeds, it will drag on for years and years and years and... There has to be SOMEONE out there who is remotely familiar with how the 'justice' system works in this country, as of now... I predict at LEAST 18 months before a 'judge' even sees this case, due to motions and counter-motions...

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