Tags: bonuses, Deeb Salem, disputes, Goldman Sachs alums, moms
Former Goldman Sachs trader Deeb Salem was awarded $8.25 million in 2010. He wanted $13 million and continues to fight for the extra 5 mill four years later because 1) While at Goldman, he was the Michael Jordan of investment professionals in the mortgage industry and had to fend off highly appealing offers from other firms on a near daily basis and 2) He had told his mother to expect 13.
Salem said in an arbitration hearing that he was led to believe that his 2010 bonus would be $13 million, down from a $15 million award for 2009 when he was paid more than Chief Executive Officer Lloyd C. Blankfein. Instead, Salem said his bonus was unfairly docked because of a written warning he received about his 2007 self-evaluation. Salem, 35, said the $8.25 million bonus for 2010 didn’t reflect his contributions, while Goldman Sachs argued he was aware that the firm could pay him whatever it wished and that the company considered his conduct in determining compensation. Salem said promises from executives kept him around for another year before a $3 million bonus led him to jump to a hedge fund. “Let’s be very clear: I was one of the most sought-after investment professionals in the mortgage industry,” Salem said during the Feb. 25 hearing. “I had the opportunity throughout the course of my career and throughout — from that day, from almost every month that I was at Goldman, to leave for other opportunities.” [...]
In January 2011, Salem told his mother, who was staying with him because her house had burned down on Christmas, that he expected at least $13 million for 2010, according to the transcript. That was based on the fact that his mortgage-trading desk generated about the same amount of revenue in 2010 as it did the previous year and that Justin Gmelich, a credit trading executive, told him at a cocktail hour that he was a “steal” at $15 million, Salem said. Salem received an $8.25 million bonus after getting the warning for “extremely poor judgment” in discussing a short squeeze in his self-evaluation. Goldman Sachs executives told him the firm would make it up to him and encouraged him to stay, he said. That came after President Gary Cohn persuaded him to remain in 2008 rather than leave with colleague Josh Birnbaum to start a hedge fund, Salem said. No promises were made, Andrew Frackman, a lawyer at O’Melveny & Myers LLP who represented Goldman Sachs, said at the hearing.
Ex-Goldman Trader Says Bonus Cut to $8.25 Million Unfair [Bloomberg]
Earlier: Bonus Watch ’10-12: The Self-Described Michael Jordan Of Goldman Sachs