Goldman Sachs, weighing 2010 pay packages for a year that could rank as Wall Street’s second best, said it may grant bonuses that depend on future earnings, in addition to stock performance.
The awards would go to “key employees” and be tied to a variety of financial measures including revenue, net income and return on equity, a gauge of profitability, the company said in a regulatory filing. Awards may consist of cash, securities or other components, and carry provisions allowing their cancellation or return.
The plan “is a tool the compensation committee may use to further align incentive compensation with long-term performance,” said Stephen Cohen, a company spokesman. Cohen declined to provide figures on potential payouts, saying that awards haven’t been set.
Regulators have pushed banks to design pay packages for top employees that would discourage excessive risk-taking, after a financial crisis wiped out firms including Lehman Brothers and led to government bailouts. Most firms have interpreted the guidance to emphasize deferred stock awards over cash bonuses.
Goldman Sachs’s new program aims to ensure “that the firm’s incentive-compensation structure is balanced and consistent with the safety and soundness of the firm,”according to the filing. It won’t fuel “imprudent risk-taking,” it said.