Goldman Sachs Group Inc. (GS) awarded Chairman and Chief Executive Officer Lloyd C. Blankfein $19 million in compensation for 2010, almost double the prior year, and granted him the first cash bonus in three years.
The total includes $5.4 million in cash, $12.6 million in restricted stock, a $600,000 salary and about $464,000 in other benefits, the New York-based firm’s proxy statement showed. Blankfein’s $9.8 million pay for 2009 included $9 million in restricted stock plus salary and other compensation.
Goldman Sachs, the fifth-biggest U.S. bank by assets, boosted Blankfein’s compensation for a year in which earnings dropped 38 percent and the stock price was little changed. The amount falls in the middle ground between 2008, when Blankfein, 56, and six other senior officers got no bonuses, and the record-setting $67.9 million award he received for 2007.
“The fact that they would return to a more market-based pay is probably not surprising” after lower amounts for 2008 and 2009, said Rose Marie Orens, a senior partner at Compensation Advisory Partners LLC in New York. “They’re not quite back to anything remotely like what they paid in the prior years.”
Goldman Sachs’s 2010 share performance -- a decline of less than half of 1 percent -- outstripped competitors including Bank of America Corp. (BAC) and Morgan Stanley (MS), which was the second- biggest U.S. securities firm after Goldman Sachs before both converted to banks in 2008. Shares of JPMorgan Chase & Co. (JPM), which reported a record profit last year, rose 1.8 percent during the year.
All 30 members of the Goldman Sachs management committee received only restricted stock for their 2009 bonuses and four of them -- Chief Financial Officer David A. Viniar, 55, President and Chief Operating Officer Gary D. Cohn, 50, and Vice Chairmen J. Michael Evans, 53, and John S. Weinberg, 54 -- received exactly the same $9 million award as Blankfein.
For 2010, Goldman Sachs once again matched all of those four executives’ bonuses to Blankfein’s $12.6 million in restricted stock and $5.4 million in cash. All four also received a $600,000 salary in 2010.
“They’ve had a history of paying their top five like partners,” Orens said. “It’s unusual, but it really comes from their partnership mentality.”
The firm disclosed in January that Blankfein’s salary will increase to $2 million in 2011 and that Cohn, Viniar, Evans and Weinberg will each receive a $1.85 million salary starting this year. Each of them had received a $600,000 salary since 1999, the year the firm became a public company.
Gain From Investments
Blankfein and eight deputies reaped a total of $125 million during 2010 from their investments in private equity and hedge funds managed by the firm, the proxy disclosed. Blankfein’s payments, which included profits and any return of capital, totaled $27.2 million, outstripping his compensation.
After Blankfein, the largest fund distributions were $23.3 million to General Counsel Gregory K. Palm; $20.2 million to Cohn; $16.7 million to Viniar; and $13.7 million to Evans. The others disclosed in the filing were $10.9 million to Vice Chairman Michael S. Sherwood; $6.4 million apiece to Weinberg and General Counsel Esta E. Stecher, and $430,000 to Alan M. Cohen, global head of compliance.
Goldman Sachs’s executives stand to earn more cash bonuses in future years under a long-term incentive plan disclosed in the proxy. The payments are contingent on two financial measures: return on equity and book value per share.
The initial measurement period is three years and the board can extend it through the end of 2018. The notional value of the award for all five executives named in the proxy was $7 million, a figure that wasn’t included in the 2010 compensation because it won’t be delivered for three years.
The SEC requires that the company’s proxy disclose how much compensation executives received during the fiscal year. Under that methodology, which includes awards received during 2010 for performance in prior years, Blankfein received a total of $14.1 million in compensation.
Goldman Sachs’s board has unanimously recommended that the firm give shareholders a non-binding advisory vote on executive compensation every year.
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