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Goldman Sachs Partners Reap $175 Million From ’08 Options

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Goldman Sachs Group
In December 2008, Goldman Sachs Group Inc. granted 36 million options in an effort to give top performers an incentive to stay after the bank reduced compensation expense by almost half during the financial crisis. Photographer: Scott Eells/Bloomberg

March 8 (Bloomberg) -- Goldman Sachs Group Inc. partners exercised more than 4 million options that were awarded at the end of 2008, reaping $175 million while cutting their ownership of the firm in recent weeks.

The partners owned 10.2 percent of the company’s shares on Feb. 21, down from 11 percent a month earlier, according to a regulatory filing yesterday. Eighty-two partners exercised options from Jan. 28 to Feb. 21 that yielded $175 million after covering the cost of the options and some tax withholding, the filing shows.

The conversions bring the total netted by partners this year from the 2008 options to more than $250 million, as the employees benefited from a doubling in the firm’s stock price since the financial crisis. The options vested over three years ended in January 2012, and shares gained through such awards couldn’t be sold until this year.

In December 2008, Goldman Sachs granted 36 million options in an effort to give top performers an incentive to stay after the bank reduced compensation expense by almost half during the financial crisis. More than 34 million of those options were still outstanding at the end of 2013.

Ashok Varadhan, who was promoted to co-head of trading last month, netted $13.8 million from exercising the calls, while Gregory A. Agran, who runs the commodities unit, received $11.8 million this year. The investment bank’s top leaders didn’t receive the options, as Chief Executive Officer Lloyd C. Blankfein, 59, and President Gary D. Cohn, 53, took no bonus for 2008.

The awards were granted at an exercise price of $78.78. The shares closed last week at $174.26, after climbing more than 38 percent each of the past two years.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net Christine Harper

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