First off, in case any of you were unaware, our stance regarding "say on pay" is that no CEO should ever allow him or herself to be roped into such a demeaning situation. You might as well work on commission. We don't even think anyone should entertain a discussion on the matter. The board either believes in you 100 percent or not at all. Unfortunately, sometimes the snakes known as your shareholders trick you into walking into the room under the guise of bagels and lox, and them bam! they surround you, and start demanding your compensation be tied to performance. This happened to Goldman Sachs CEO Lloyd Blankfein yesterday. He handled it all wrong.

Blankfein told shareholders pushing for a "lid on excessive pay" at GS's annual meeting that he was very concerned about the company adopting the proposal, as it would “create a feedback loop. It would create a cloud, a constraint, a limitation on decisions that have been at the heart of what a board has done." The whole thing was said to be very impassioned and that at several moments, one could detect a slight cracking in Blankfein's voice. Huge mistake. Obviously Blankfein, who was paid $70 million last year would like to keep himself in the lifestyle he's become accustomed to. But as the CEO on Wall Street who's fucked up the least in recent memory, he should be playing it cool. He should've walked in there and said "I am Lloyd fucking Blankfein. There will be no say on my pay. In fact, bitches, just because you have offended me, I want my 2008 bonus package to be determined today. $100 million. That's right, a unit, baby." Then dropped the mic and walked off. And you know what? They would've said okay. You want say on pay, I have two words for you, people: Jimmy Cayne. I hear he's looking for work, and will agree to just about anything.

Goldman Chief Says ‘Say on Pay’ Would Be Damaging [DealBook]

I didn’t intend for today’s posts to be a service guide on how to keep it classy sans cash but that’s how it’s turning out and why fight it? 20,000 ex-Citi employees and everyone who currently works at Bear Stearns need our help. So you say you want to live in a lavish apartment on Central Park West, replete with high ceilings, gigantic closets and Spanish marble bathrooms, but can’t swing the $875,000 to $2.24 million asking price? Not a problem. Two words: French maid (alternatively: janitorial staff). Twenty-one studios and three one-bedroom units in the much-hyped 15 Central Park West are reserved for the hired help of the building’s residents trying to overcompensate the most (they’re only available to those buying condos of at least 4,000 square feet). The question is, whose toilet would you most like to scrub in exchange for free (and swanky!) accommodations. The options include Lloyd Blankfein, Dan Loeb, Dan Och, Sandy Weill and some GS trader named Ashok Varadhan who probably didn’t meet the minimum square footage necessary for live-ins (also too cheap for an on-site housekeeper: Bob Costas). Considering that fifty percent of my salary goes toward rent anyway, and the job couldn’t possibly (or legally) pay less than half of what I make, I’m thinking about applying for one of the slots. Shot gun on Blankfein, as something about him screams “neat freak” by nature, and I don’t want to be cleaning up after a slob.

Blankfein, Sting Are Maid's New York Neighbors for $1 Million [Bloomberg]

Goldman Sachs is set to pay Lloyd Blankfein $75 million in stock and cash this December, $20 million more than he took home last year. How groundbreaking. Seriously, a Goldman employee being paid a ton of money, while Bear Stearns tries to cover up the fact that last week it bounced 15,516 checks at the same time, is utterly revolutionary. Personally, even though he claims not to need our pity, we feel sorry for Blankfein. How boring must it be to come into the office every day, push some papers, twiddle some thumbs and know with the highest degree of certainty that you’re going to get a huge bonus, without fail? Wouldn’t it be more fun, or at least more exhilarating, to be constantly wondering, a) Forget about bonus—will today be the day I get fired? B) If I do get fired, how handsomely will I be rewarded for fucking up so badly? A lot or a little? C) Would it be bad if I laced this big bag of pot with some embalming fluid and smoked the whole thing over lunch? Or bad in a good way? That guy's masking his ennui and we know it.

Goldman CEO In Line For $75 Million Bonus [NYP]

The Pritzkers, who are like the Hiltons you still recognize with clothes on, sold a $1 billion stake in their Hyatt hotel chain to Goldman and Madrone Capital Partners started by Wal-Mart chairman Rob Walton.

Speculation about the fate of Hyatt has been on the rise with the chain’s ongoing restructuring plan, internal family drama, and Blackstone’s $26 billion Hilton buyout. The Hyatt restructuring has involved 53 internal mergers, expansion into China and preparations to release detailed financials.

The Pritzker domestic squabbles culminated in a $1 billion lawsuit a couple years ago in which Liesel Pritzker accused her father Robert of tapping into the trust fund. Liesel eventually won $450 million (or lost $550 million, or made normal people want to cry).

Liesel has taken the stage name “Matthews” (or mom's maiden name) for a number of screen roles (and real life), including Sara Crewe in the mid-90s classic, “A Little Princess,” which is one of Lloyd Blankfein’s favorite films, and played a vital role in getting Goldman to pull the trigger on the purchase. Scenes like this are not uncommon at 85 Broad Street:

Miss Minchin (played by a confused junior analyst): Don't tell me you still fancy yourself a princess? Child, look around you! Or better yet, look in the mirror.
Lloyd Blankfein: I am a princess. All bank CEOs are. Even if they live in tiny old attics. Even if they dress in rags, even if they aren't pretty, or smart, or young. They're still princesses. All of us. Didn't your last boss ever tell you that? Didn't he?

Actually, the entire premise of “A Little Princess” is that a batty girl (Sara Crewe) in an oppressive boarding school responds to every situation by claiming that she is a princess. A typical scene:

Random Teacher: Your dress is on fire.
Sara Crewe: I am a princess.
Random Teacher: I’m fucking serious, your dress is on fire.
Sara Crewe: All girls are princesses, even if they are burning, or freezing, or suffering from a horribly infectious rash.
Random Teacher: Stop, drop and roll bitch, our insurance doesn’t cover this.
Sara Crewe: All girls are princesses, whether they are stopping, dropping or rolling…

This has also been the Goldman response to its hedge fund’s ignominious performance (Investor: Your hedge fund is blowing up, Goldman: We’re princesses, we’re Goldman, we’re Wall Street Royalty alright! We’re PRINCESSES!”)

Pritzkers sell $1bn stake in Global Hyatt [Financial Times]

The soon-to-be opened 15 Central Park West—what, you haven’t heard of it, hobo? Basically: the Kosher 740 Park—just added Sandy Weill and Daniel Och (-Ziff) to its list of inhabitants. Other Shul-enthusiasts on the condominium complex’s roster include Lloyd Blankfein and Daniel Seth Loeb, who bought a penthouse in the building for $45 million in 2005.

Interested in the property? Too bad—all the units have sold. However, developers Arthur and William Zeckendorf predict that there may be up to ten flipped apartments up for grabs when the building opens in the fall. So if you think you can stand living alongside the nouveau-riche, and are willing to risk having one of Loeb’s pet gerbils burrow a hole into your apartment, here’s the low-down:

-The building is coated in 2,832 panels of limestone from the same Empire Quarry in Indiana that makes up the skin of the Empire State Building.

-Working fireplaces (fireplace fetishizer Weill would sooner live in a studio on Rivington than a penthouse without an accessible means of burning things, you know this)

-Screening room

-Game room

-60-seat lobby dinging room (with private chef)

-Health club

-A waiting room for chauffeurs

-29 maid’s suites on low floors so you Louisa can work around the clock but not contaminate your personal space

-30 wine rooms surrounding “an octagonal tasting area”

-31 autofellatio rooms, all finished in English oak, with a lovely marble trim

-Pizza party Fridays

15 CPW [NYO]

Hoping to capitalize on Russia's "huge potential," Goldman Sachs announced (for the second time) that it will add 25 bankers to its Moscow office, bringing their total to about 100 by the end of the year. Why didn't Goldman move in for the kill (particularly in the commodities sector) sooner? Oh, some legal stuff. A question as to whether or not corruption would "mesh" per se with the GS aethestic. Things like that.

"There are a lot of things to do' in terms of getting rid of corruption in some parts of the economy and creating legal certainty," Alexander Dibelius, who oversees Goldman's business in central and eastern Europe told Bloomberg. But that doens't mean "we should limit our presence here, it just tells us that we have to be conscious about what business we can do and what business we can't do...And I could definitely see over the near term our Russian business overall going to an interesting triple-digit million- dollar figure in terms of revenues,'' Dibelius noted.

Right now Goldman is fighting with Deutsche Bank AG and Barclays Plc in a "tremendous war for talents." GS managing directors dealing with corporate mergers and stock/bond sales in Russia are earning $7 million plus a year, versus the 2-3 million that guys (and girls) doing the same work in New York are making. Compensation rose 25% for bankers last year in Russia, on account of a 5-year oil boom, a record number of IPOs, and Russia’s place as the fastest growing major European economy.

In other news, the Dr. Omar bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC), inaugurated the new office of Goldman Sachs at the DIFC, opened on account of Dubai's great public schools.

Earlier: Commie Schadenfreude

Goldman Expands Moscow Office to Tap `Huge Potential' [Bloomberg]
Goldman Sachs opens office in DIFC [Gulf News]

There’s a new sheriff in BP town but will there be one at Goldman Sachs, too? The boys at Rupert Murdoch’s Deal Journal note that Lord Browne (John Browne, Baron Browne of Madingley) has been a director at Goldman since 1999 and wonder if recent revelations might threaten that position. The London Times reports that Browne will lose his night job (and the $500,000/year that comes with), though their sources were unnamed and Goldman representatives declined to comment. The Lord will retain his role on the advisory board (as chairman) of Apax Partners Worldwide, the U.K. p.e. firm, but, as Deal Journal points out, us provincial Americans, and the extremely image conscious Goldman Sachs in particular, may not be willing to overlook Browne’s use of company funds (and perjury).

While we can vouch that Goldman—more so than other banks we’ve encountered—is a bit fanatical about its reputation, and has instilled a certain fear in its employees (whenever we IM our friends at 85 Broad for insider information or for a recap on their nights at Tejune, they hardly ever write back), perhaps they’ll overlook what happened across the pond in light of Browne's business acumen (and because he wasn’t using their money, hence, not their problem). It’s not like Lloyd Blankefein doesn’t have any skeletons of his own (Magic Mountain is all we can say and we've already said too much).

Lord Browne and an Unlucky Number at Goldman [Deal Journal]
Browne-Goldman II: Apax Stands Firm [Deal Journal]
Apax Keeps Browne as Chairman After He Lied to Court [Bloomberg]
Lie over gay partner ends BP chief’s career [London Times]

Jim Cramer doesn’t want you to hate the game, or the playa. And in his column in the latest issue of New York, the “game” refers to making money; the “playas,” I-bankers (and I-bank CEOs, and, more generally, I-banks). Sure, you might be saying, why shouldn’t I hate the $54 million/year Lloyd Blankfeins and the Goldman Saches of the world? Not only are they terribly unhygienic, but they make more in an hour than I do in a month (or is that just us at DB? Don’t answer that) and I’m a jealous, small and petty person (to say nothing of my unresolved issues from childhood, which probably feed into the pettiness in a vicious, never-ending circle).

You’re saying that, right? Well Big J has the answer. If you invest said “playas,” you’ll get to be part of their “game” and your resentment will disappear because when you’re rich, you can buy the antidote to resentment. Another reason you shouldn’t hate these “playas” is because Cramer used to work for Goldman Sachs and never fails to mention this (or his relationship with Spitzer, which, let’s be honest, you really can’t blame him for, because Goldman Sachs is an incredible institution and Spitzer is essentially God’s special gift to the world and politics at large). Here are some other arguments for why you should cross Lloyd, Dick and Stanley off of your To Kill lists (hint: they all have to do with their outifts making you money, and Chuck Prince having less financial acumen than Cramer’s garbage disposal):

1. These guys are basically stay-at-home moms: underpaid and, more importantly, unappreciated.

Stop envying Goldman Sachs’ Lloyd Blankfein already. Don’t begrudge Bear Stearns’ Jimmy Cayne and Lehman’s Dick Fuld their millions. Let Merrill’s Stan O’Neal and Morgan Stanley’s John Mack get paid more than Croesus. You heard it here first: They deserve it. In fact, they deserve more than they earn now. Those five men are underpaid because they are about to make you very rich if you buy their stocks.

2. They will make you Kings of Great Neck, Dukes of Roslyn with Asset Management alone. And, not to brag or anything, but if you must know, Cramer predicted Asset Management would be a major money-maker YEARS AGO, before assets were even invented. Of course, no one at 85 Broad listened to him, just like they didn’t about gravity or 9/11.

Apparently Lloyd Blankfein wasn’t reading Dealbreaker the day we clearly laid out a bunch of alternative ways for the Masters of the Universe to spend their bonuses, back in January (the acquisition of hornymantee.com, 2 million Jim Cramer bobblehead dolls, an all-access pass to the Andrew Ross Sorkin Pleasure Palace, and so on and so forth). Radar reports that the old boy has purchased a $41 million home in Southhampton (which apparently retails for such a sizeable chunk of change because it comes with a name: “Old Trees”), on First Neck Lane.

Spread out on 10.6 acres, the estate boasts a clay tennis court, an ocean-view swimming pool, 13 bedrooms, a “cottage” (with its own pool) and a “barn” for entertainment. Stephen Schwarzman couldn’t be reached for comment, because he’s in the midst of planning a surprise hostile takeover of the property. On a related note, Tom Hudson has just agreed to go in on a summer share in hell.

Sachs' CEO Drops New Money on 'Old Trees' [Radar]

Earlier this afternoon, Deal Journal editor and weasel we love Dana Cimilluca took a look at some cold hard facts, Re: is Blackstone the new Goldman Sachs? The answered seemed to be yes, based on a series of data points including but not limited to private equity, earnings growth, and revenue per employee; but advocating for the devil, as we sometimes like to do, we decided to take a closer look.

Real Estate Everyone knowsthat the Goldman Sachers’ nicknames are “Masters of the Universe,” as ripped from the pages of Tom Wolfe’s Bonfire of the Vanities. What people don’t know is that Goldman and Goldman groupies (Carney) no longer have the right to refer to Blankfein and his henchmen as such, as a result of the Stoners’ successful acquisition of Eternia, some months back. Since occupying Eternia HQs—Castle Grayskull—Schwarzman and friends have been meaning to send out change of address cards (and, therefore, rightful ownership of the moniker, “Masters of the Universe"), but have been busy fending off attacks by Skeletor, Hordak, the Snake Men and Sam Zell, all of whom believe that the secrets inside would allow them to conquer Eternia. Point: Blackstone

Secret Powers Blackstone: A wife who knows how to make a great centerpiece. Goldman: This kid. Point: Goldman.

Hedge Funds You’d think, what with Blackstone’s 8.9% returns since October, versus Goldman’s negative 6% returns last year, this category would have a clear winner. It does, but not the one you might’ve guessed. Sources (drugs) tell us that Blackstone has plans to invest heavily in former Amaranth trader and famed icthyophile Brian Hunter’s new winery hedge fund, Solengo. Point: Goldman.

SuccessorsThis is Cringer. Please relate back to the Blackstone CEO in waiting, Tony James. Point: Goldman.

Blackstone vs. Goldman II [Deal Journal]

via the E-man. [Crossing Wall Street]

We realize that every time we write about another Geoffrey Raymond masterpiece (Grasso, Blankfein, etc.), we're only encouraging him. But it's that long stretch of afternoon when there's not too much to post about (admit it: that last Jobs one, save for the fantastic accompanying picture, didn't make your DB Top Ten list); so we're going to indulge him, once again. After the jump, his latest portrait. Let us just say, the resemblance is striking.

There are a bunch of things we liked about Forbes’s profile on Lloyd Blankfein:

1.Writer Neil Weinberg describes LB as a “nebbishy Master of the Universe,” which, considering the source, has got to sting. (Just kidding, who wouldn’t want to be regarded as “poor, unfortunate” and “un-endowed”?*)

2.It’s full of facts.

Goldman's earnings set an alltime high for investment banks in 2005--then grew 76% last year to set a new record. In 2006 revenue rose 50% to $38 billion (net of interest cost). Its dealmakers handled an industry-high $1.1 trillion in mergers and acquisitions; its wealth managers raked in $94 billion in new customer money. Its stock climbed 55% to hover near $200.

3.It reaches out to insomniacs and coke addicts alike:

Blankfein can't sleep some nights.

4.It includes pie charts. Pie charts!

And one thing we viscerally did not like:
1.The fact that Neil Weinberg (or whoever came up with the title “Sachs Appeal”) has a disturbingly similar sense of humor to our father, who’s go-to joke is the following:

A bunch of kids get on a bus and go over to an old man and start heckling him. At one point they say to him, "Hey Grandpa, what do you think about sex?" he responds "I think it's a great depahtment store."

Sachs Appeal [Forbes via DealBook]

*http://www.etymonline.com/index.php?term=nebbish

As a relatively unknown federal prosecutor, Rudy Giuliani made himself a public figure with the prosecutions of several Wall Street financiers in the eighties, including Marc Rich, Pincus Green, Ivan Boesky and Michael Milken. He pioneered the use of anti-organized crime statutes, such as RICO, to go after Wall Streeters. But that hasn’t stopped him from winning friends in the finance industry. Aides formulating his presidential campaign—as detailed in a batch of documents obtained by the Daily News—hope to raise millions from prominent names in the financial world, including KKR’s Henry Kravis and Goldman Sachs’ Lloyd Bankfein.

In a memo that appears in the dossier, Giuliani aides Dickerson and Roy Bailey urge him to court financier Henry Kravis particularly avidly.

"You need him to be a Wall Street industry leader," the memo says.

McCain announced Kravis' support last month.

The plan also anticipates his recruiting top GOP fund-raiser Cathy Blaney in New York on a retainer of $260,000 and her Florida counterpart, Ann Herberger, at $216,000. But between the plan's preparation in the fall and today, Blaney became the chief fund-raiser for the World Trade Center Memorial Foundation, while Herberger reportedly has signed on to the presidential campaign of Massachusetts Gov. Mitt Romney.

Other business leaders targeted by Giuliani remain publicly uncommitted: Paramount CEO Brad Grey, Giuliani's talent agent after 9/11, is envisioned as leading a "celebrities" fund-raising arm; former Vikings quarterback Fran Tarkenton would raise money from professional athletes. News Corp. CEO Rupert Murdoch, PepsiCo chief Dawn Hudson and Goldman Sachs president Lloyd Blankfein are also listed as "industry leaders."

The documents depict hedge fund tycoon Paul Singer, a close Giuliani ally, playing a central role in his fund-raising operation.

The dossier doesn't make clear whether the people named have committed privately to Giuliani or even been approached to support him.

Revealed: Rudy's '08 battle plans [Daily News]