For some Goldman Sachs employees, it’s as if the Grinch stole their Christmas bonus. Or more specifically, CEO Lloyd Blankfein.
The firm today announced that its top 30 employees would not be receiving cash bonuses for 2009, as the gold-plated bank looks to quell a potential firestorm caused by reports of outsize bonuses. Instead, they will be paid in stock.
Lower-ranked employees will continue the Wall Street tradition of getting a combination of cash and stock.
“The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders’ meeting in May,” Blankfein said in a statement.
Blanfein’s move is a direct acknowledgement of the mounting pressure Goldman faced as its bonus pool ballooned to $16.7 billion in the third quarter and is on pace to set a record of more than $20 billion.
Goldman has been bashed by the public because of the perception that it has flourished off the back of $10 billion in federal aid. Goldman has since paid back that money.
Other restrictions being imposed on Goldman’s employee compensation package are so-called claw-back provisions that allow the bank to take back the bank’s money in order to disincentivize short-term risk taking.
One source said that Goldman views the changes today as a crystallization of pay practices it already has in place.