Goldman's CEO, Lloyf Blankfein collects $68M bonus

Discussion in 'Wall St. News' started by crgarcia, Dec 22, 2007.

  1. Goldman's Blankfein collects $68M bonus

    Payday in restricted stock, options and cash marks biggest ever for Wall Street CEO.

    By David Ellis, staff writer
    December 21 2007: 6:51 PM EST

    Goldman Sachs Chairman and CEO Lloyd Blankfein will take home the biggest CEO bonus in Wall Street history, after he was awarded nearly $68 million in cash, options and restricted stock.

    Despite financial market volatility, Wall Street bonuses will be robust again this year. CNN's Maria Ines Ferre reports.

    NEW YORK ( -- Goldman Sachs Chairman and CEO Lloyd Blankfein will take home nearly $68 million in restricted stock, options and cash, making it the largest bonus ever given to a Wall Street CEO.

    Blankfein was awarded $26.8 million in cash and $41.1 million in restricted stock and stock options, according to a company filing with the Securities and Exchange Commission issued Friday.

    With this year's bonus, Blankfein shatters the record he set a year ago, when he was awarded $54 million.

    News reports had originally projected that Blankfein will take home as much as $70 million, after helping to lead the company through this summer's market meltdown and the ongoing credit crisis.

    Unlike some of its rivals, which have witnessed billions of dollars evaporate from their balance sheets, Goldman Sachs has proved unshakable. Just this week, the company reported better-than-expected fourth-quarter earnings, while peers like Morgan Stanley and Bear Stearns recorded steep losses.

    As it stands right now, Blankfein will be among the few Wall Street CEOs to collect a bonus this year. After this week's dismal results, Morgan Stanley (MS, Fortune 500) Chairman and CEO John Mack and Bear Stearns (BSC, Fortune 500) chief James Cayne both announced they would forsake their 2007 bonuses.

    While bonuses are common throughout corporate America, they are a far bigger part of overall compensation for all levels of employee pay on Wall Street than they are at a typical corporation.

    Tom McMullen of the Hay Group, a human resources and management consultant, estimates that cash bonuses typically equal between 40 and 100 percent of base salary for top executives on Wall Street, while senior managers receive between 15 to 30 percent of base pay as bonus payments. Even entry-level employees might see 10 to 20 percent of their base pay in the form of a bonus.

    This year was expected to be a difficult one for finance pros given the recent market turmoil and the ongoing credit crisis. Overall, financial firms were expected to cut bonuses up to 10 percent from a year ago, according to industry projections.

    A year ago, bonuses on Wall Street reached a record $23.9 billion, averaging more than $136,000 per employee, according to the New York State Comptroller's office.

    Facing the biggest bonus squeeze were those individuals working in mortgage-related areas, with their bonuses declining by as much as 50 percent from a year ago, according to a report published last month by the compensation research firm Options Group.

    Even though dealmaking has slowed considerably on Wall Street, investment bankers are still expected to enjoy a bump in their annual bonus from a year ago given the frenetic pace of merger-and-acquisition activity in the first half of 2007.

    With so many banks underperforming, many financial firms were widely expected this bonus season to shift from cash to stock in an effort to compensate employees while retaining talent. Some firms have already said they would cap their cash compensation, including UBS, which announced a limit of $750,000 for its workers.

    Goldman Sachs (GS, Fortune 500) stock finished more than 3 percent higher in Friday trade.
  2. What did Paulson pull down? You know--payment for order flow and all :D
  3. Paulson earned approx $800MM from his partnership stake in GS.
  4. Goldman pays records bonuses every year and analysts wonder why they out perform all other bludge bracket investment banks.