Back in December, Goldman Sachs put a 14-page presentation on its website detailing the metrics they use to award compensation (naturally, it’s by scrot-size). They didn’t have to, but because they care deeply for their shareholders, wanted to just, you know, be up front about everything. No more secrets, no more bull shitting, just straight up open and honest communication. It was a pretty huge step for Lloyd and his backup dancers, who figured it’d score them some major points, and ward off any potential chance of being put in the dog house over making it rain ka-ching! on their employees faces without discussing it first. And yet! Today some ungrateful pissant of a shareholder, Ken Brown, taking a cue from the Village People, has sued the bank over what he characterizes as “a waste of the company’s assets and a breach of duty and loyalty.”
The so-called derivative suit, brought on behalf of a Goldman Sachs shareholder Ken Brown, an Illinois resident, was filed in state court in New York on Jan. 5, alleging breach of duty and loyalty. The suit seeks unspecified damages and lawyer fees and asks the court to direct the defendants, including Goldman Sachs Chief Executive Officer Lloyd Blankfein and company directors, to account for “all profits and special benefits they have obtained,” Brown says, “including all salaries, bonuses, fee stock awards, options and stock sales.”
“In 2009, the year it received help from the Federal Reserve and took advantage of market conditions as a result of the TARP and other programs, it paid out close to 50 percent of its net revenue in compensation,” Brown alleges in the complaint. TARP is the U.S. government’s Troubled Assets Relief Program. Brown alleges that while Goldman announced last month that the company would make changes to its 2009 compensation, the revisions are merely “cosmetic” and don’t affect compensation paid out in 2008 or reduce the amount paid to 14,000 executives in the company. He says the defendants “automatically” set aside about 44 percent of net revenue for employees, regardless of performance.
“Payment of this exorbitant amount of compensation, which has little to do with Goldman Sachs’ performance, and was financed in large part with government bailout and taxpayer money,” Brown alleges “is a waste of the company’s assets and a breach of duty and loyalty.”
First off: did he not see the presentation?? How was that not good enough?? Second: “a waste”? How dare you.
If they paid TARP back, how was compensation financed by TARP? Bigger waste of assets: paying lawyers to deal with derivative suits.
PPIP, TLGP, Fed discount window, etc, etc. He apparently doesn't realize they need to get theirs before the big crash and the country looks like Oz in Mad Max…
"unspecified damages"
Right. Let's see him allege damages with specificity. Wonder how much he's trying to greenmail them for.
Transparency in corporate america?
Not likely
If government had not stepped in to bail out AIG and force the merger of Merrill and B of A , Goldman (and the US financial market) would have been toast. Goldman was bailed out not just through TARP funds or by being paid (with our money) 100 cents on the dollar on their multi-billion exposure to AIG but because , without government intervention in the marketplace after Lehman (of not so blessed memory )was allowed to fail, Goldman and Morgan Stanley would have also failed.
So after being bailed out and then gaining access to federal funds at almost zero cost to run their in-house casino (admittedly Goldman is VERY good at running a casino) , now without shame they tell us that they will pay record bonuses to their employees. Yes I know the top 30 execs are getting no cash, but each of these people are centimillionaires already and they are getting more stock.and yes I recognize that Goldman does god's work but despite that what they are doing makes my blood boil. And I am not a liberal!
I cannot begin to comment on this situation until I get someone's thoughts.
@5 = Indiana liberal
God is going to be really pissed!!!! Brown better get used to liking locust and boils. Of course, he already lives in the midwest so maybe that's punishment enough!
@5 liberal,
Boiling blood attracts vampire squids.
JC
What about the employees that are not part of management and don't get all the perks…should they also be penalized?
"the defendants 'automatically' set aside about 44 percent of net revenue for employees, regardless of performance."
Is this not central to the notion of performance-based compensation?
@1 Lloyd, shouldn't you be doing God's work?
@5 If you're blood is boiling then you're toast. Grab yourself a decaf moca latte and chill out.
@ Ken Brown, you made a mistake, you should have never bought the stock if you had a problem with out of whack comp.
@ GS You suck.
I'm gonna sue GS so I can make a lot of money I don't deserve with the argument that they made money they didn't deserve. Pot meet Kettle.
@5 go back to Yahoo! Green Peace forum you hippy liberal douche.
@12 – I'm sure he bought the stock specifically to sue. Although I can't stand GS (and more importantly the ridiculous/illegal/corrupt backstopping of GS by the Feds) – his suit is worthless unuless he can show the stock price went down bc of the bonuses – which it hasn't. That said, GS should/would not exist without taxpayer largesse.
Oh, Guests…….The dude filed a derivative lawsuit. Go look it up, Tards….he doesn't get the money!
Countdown until this gets dismissed/thrown-out 3…2…1…
@16 I believe you are lost, poor soul. Out of kindness I will direct you where you need to be: http://abovethelaw.com/
GS getting paid through AIG's bailout is almost the most disgusting thing I have read this year. Until we find out that lil Timmy G may have withheld the info from the govt before the AIG bailout actually occurred. He should go to jail and he is one guy who actually should be tried in NYC.
Obama sucks. Thats has nothing to do with this post but i like saying it.
A few points seem to be missing from this whole conversation, namely, that there is no real economy without finance; that the alternative to profit-driven banking is pure kleptocracy; that banks do not create nor neutralize risk but merely re-allocate it; that compensation is essentially COGS, more contra-revenue than expense, and does not in that sense belong to shareholders; that profits are effectively socialized through taxation, more so through income tax, but losses are generally privatized; and that the people being paid the most tend to have a talent for negotiation.
Wow that picture was disturbing.
@InfiniteGuest – does Lloyd let you wear kneepads?
How is this CAPITALISM?!!
These crooks are being subsidized by the TAXPAYER!! AIG! BACKDOOR!! SLUTS!
Where the OUTRAGE!??!! ZH! GOLD!!
@22, ha! Really, I'd just like to see a more thoughtful and honest discussion take place.
This is not a commentary on finance as I agree with the Mayor that WS is the life blood of NYC. I dont feel that WS is to blame for people buying homes they cant afford. What i think is criminal is GS taking taxpayer money as profit. They didnt need the money to stay alive this was just to fatten their pockets.
If I make a bet and win my bet and my bookie cant pay me cause he has no cash. Well then its my tough shit. I dont understand the govt stepping in to hand GS a sack full of cash.
This is not about attacking capitalism since i am unaware of how the govt taking tax money and handing it over to a company has any place in a capitalist economy. I think that sounds a bit more dare i say socialist. Ahh the hypocrisy of GS, a model of and product of capitalism getting fat on govt directed, TAX PAYER CASH.
UNREAL!
why did you choose that picture?! i'll never be able to look at pretty naked girls again without their faces turning into THAT. arrrrrrgggggghhhh….
@28 i'd love to throw dollar bills at LB and make him smile, ACTUALLY. Come on lloyd, give us some more of those crazy grins… they excite us.
@20 you sound like my boss.
@12 – I’m sure he bought the stock specifically to sue. Although I can’t stand GS (and more importantly the ridiculous/illegal/corrupt backstopping of GS by the Feds) – his suit is worthless unuless he can show the stock price went down bc of the bonuses – which it hasn’t. That said, GS should/would not exist without taxpayer largesse.
Bess has sexual fantasies for Blankfein. Not getting enough at home Bess?
Bess has sexual fantasies for Blankfein. Not getting enough at home Bess?
@InfiniteGuest – does Lloyd let you wear kneepads?
@InfiniteGuest – does Lloyd let you wear kneepads?
@30-33 you're an idiot. and a troll who should know how to use a computer by now.
Bess has sexual fantasies for Blankfein. Not getting enough at home Bess?
Bess has sexual fantasies for Blankfein. Not getting enough at home Bess?
admit it guys… EVERYONE has sexual fantasies for blankfein.
such smooth skin, such broad shoulders, such a wicked grin: enough to make an analyst swoon. @28 so whaddya complaining about? hahaha…
@25… awesome haha. Laughing like and idiot in the office and now I need to hammer away on my keyboard to look productive.
@29 and 35 seriously need help with their sanity. blankfein looks like a troll.