Goldman Sachs top executives won't get a slice of that big bonus pie, at least in cash.
The bank announced changes to its compensation plan that will leave its 30-person management team out of the bonus cash pool this year. The executives will instead receive stock that must be held for at least five years. Moreover, Goldman reserves the right to take back those shares in the event the employee failed to properly account for risk.
Shareholders will also have an advisory vote on the firm's compensation of executives at the annual meeting in 2010.
The most profitable bank on Wall Street has come under fire from all sides in recent months, including its shareholders, for the outlandish pay packages expected to award its employees this year despite the financial industry's near collapse last fall. After its third-quarter profits soared, the firm set aside $5.35 billion for benefits and compensation during the quarter. The amount put bonuses on track to set a record this year, and marked the bank as a target for public ire.
"The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders' meeting in May. We believe our compensation policies are the strongest in our industry and ensure that compensation accurately reflects the firm's performance and incentivizes behavior that is in the public's and our shareholders' best interests," said Lloyd C. Blankfein, Chairman and Chief Executive Officer of the The Goldman Sachs Group, Inc.