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Was Hank Paulson’s Leaving Package Too Big

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The talk at one of the Independence Day barbeques we attended yesterday was whether or not the mid-year bonus Goldman Sachs said Monday it awarded to Henry Paulson, who left his position as the investment bank’s CEO to become the U.S. Treasury Secretary, was too large. Paulson was awarded a cash bonus of $18.7 million by his former employer.
But it was not the cash bonus that irked our grillmaster source, who is familiar with government ethics rules pertaining to high-level administration officials. What raised at least a yellow-flag was the announcement that certain unvested options were automatically vesting now that Paulson was taking the job at Treasury. In addition, the announcement that Goldman also agreed to buy stakes owned by Mr. Paulson and his wife in private investment funds managed by Goldman might be troublesome.
If these were extraordinary or optional decisions by Goldman, rather than Paulson exercising already baked-in contractual rights, they might be perceived as gifts Paulson by his former firm, which in many ways will now fall under his regulatory purview.
And then, of course, we tuned into SquawkBox this morning just in time to hear Charlie Gasparino tell us that Goldman wasn’t paying Paulson enough.