Goldman Sachs Group Inc. accelerated delivery of $65 million in stock awards to 10 executives, including Chief Executive Officer Lloyd C. Blankfein, helping them avoid higher tax rates that take effect this year.
The awards are restricted stock granted for years prior to 2012, according to 10 separate filings made public at about 8 p.m. New York time on Dec. 31. Each executive surrendered 45 percent to 50 percent of their awards in order to pay taxes, according to the filings. The firm’s stock climbed 41 percent in 2012, its first annual gain since 2009.
Goldman Sachs, the fifth-biggest U.S. bank by assets, typically delivers executives’ restricted stock during January. The decision to speed up the delivery came as the U.S. Congress debated and ultimately passed a bill that would increase tax rates on capital gains and on individuals who make taxable income of $400,000 or more.
“The December delivery of shares went to a wider group of employees than the named executive officers” who were included in the filings, said Michael DuVally, a spokesman for the New York-based firm. He declined to comment on the reason for the accelerated delivery or on which other employees received stock early.
Blankfein, 58, has said he would be willing to pay higher taxes if they were part of a fiscal compromise to reduce the budget deficit. Today he praised the bill that passed the House of Representatives yesterday.
“This agreement is a step forward to injecting growth and investor confidence into the U.S. economy,” he said in an e-mailed statement. “While more progress clearly will be needed, particularly in regards to restraining the growth in government spending, this measure lays the foundation for more economic growth.”
Blankfein received 66,065 shares of restricted stock on Dec. 31, worth $8.43 million at the closing share price that day, according to a company filing. The filing shows that he sold 33,245 shares for $126.24 apiece, although a footnote explains that those shares were in fact retained by the company “to satisfy withholding obligations.”
One of Goldman Sachs’s Wall Street rivals took a different approach to the changing tax landscape. Jefferies Group Inc., the investment bank that agreed in November to sell itself to its biggest owner, Leucadia National Corp., accelerated the delivery of dividends to all shareholders, including executives, on Dec. 31, according to company filings.
“We expedited the regular dividend payment for all Jefferies shareholders in anticipation of increased rates,” the New York-based firm said in a statement. “Our top executives were treated identically to every other shareholder.”
Some of the executives’ dividends were awarded as deferred stock, according to the filings. Those shares “will be taxed at the higher rates when they ultimately vest,” the company said. Jefferies CEO Richard Handler, 51, received 36,872 deferred shares at $18.57 each, worth $684,713. Brian Friedman, 57, chairman of Jefferies’s executive committee, got 9,321 shares at that price, valued at $173,091.
Gary D. Cohn, 52, Goldman Sachs’s president and chief operating officer, and David A. Viniar, 57, the firm’s chief financial officer, received the same number of shares as Blankfein and had the same amount withheld, according to filings.
The other executives who received and surrendered shares for withholding purposes were Vice Chairmen John S. Weinberg, 55, and J. Michael Evans, 55; Edith Cooper, the 51-year-old head of human capital management; John F.W. Rogers, the firm’s 56-year-old chief of staff; General Counsel Gregory K. Palm, 64; Global Head of Compliance Alan M. Cohen, 62; and Chief Accounting Officer Sarah Smith.
Goldman Sachs is required to file disclosures of changes in stock ownership by its 12 executive officers. The firm made no disclosures of stock activity on Dec. 31 by Vice Chairman Michael S. Sherwood, a 47-year-old British citizen based in London, or by Mark Schwartz, the Hong Kong-based head of the firm’s Asian business. Schwartz, a 58-year-old U.S. citizen, rejoined the firm in June after 11 years away.
Below is a table of stock delivered to each of the Goldman Sachs executives and the amount surrendered for withholding purposes, according to company filings.
*T Executive Stock Delivered Stock Surrendered
Lloyd C. Blankfein 66,065 33,245 Gary D. Cohn 66,065 33,245 David A. Viniar 66,065 33,245 John S. Weinberg 66,065 30,438 J. Michael Evans 66,065 29,896 Edith W. Cooper 45,126 20,791 John F.W. Rogers 41,876 19,294 Gregory K. Palm 36,860 18,549 Alan M. Cohen 30,085 15,141 Sarah G. Smith 23,832 11,994
(Source: Company filings) *T