How Goldman's Managed To Stay Out Of The Backdating Scandal

Author:
Updated:
Original:

As you well know, a newfangled term called ‘backdating’ has got Wall Street and its peripherals (especially those with predilections for kilts and, it would seem, cross-dressing) a bit worked up, of late, on both sides of the fence. (NB: Words whose origins can only be traced back to 1953 or later—vexillology, Kwanza, blog—are fake and, therefore, no reason to get one’s panties in a bunch, but I guess I’m a day late and a dollar short, so to speak, and you know cross-dressers—there’s never any reasoning with them). Anyway! At Market Watch, David Weidner, the guy who once advocated getting oneself up in Stevie-boy Cohen’s grill as an investment strategy, has a Goldman Sachsian take on the scandal du jour.

Ever notice that Goldman Sachs Group never seems to get involved in executive-pay scandals? No backdating, no hidden payments, no corporate-jet brouhahas. That's because largesse at Goldman comes in a variety of above-board forms. Just when you think it can't get any worse, that these guys can't get any richer, it does and they do.
Wall Street's gold standard of investment banking detailed in a regulatory filing Thursday that its executives -- who already had been awarded record compensation -- also had received investment income. A lot of it.
Like many firms on the Street with private-equity arms, Goldman allows its employees and those close to them to invest along with the institutions. That means when Goldman closes the $19 billion fund it's been working on, part of the proceeds may go to bankers inside the company.
Private-equity funds raised a record $401 billion during 2006, as 612 new funds were launched in that span, according to Private Equity Intelligence. This amount exceeded the previous record of $311 billion set the year before.
How many people you know got into those funds?
At least a small part of that money came from Wall Street big shots. With opportunities like that, who needs backdating?

Basically, Goldman never has compensation tittle-tattles because it has no shame. Blankfein and Co. just put it all right out there: our guys make more than everyone you know. Combined. Including all your one-night stands. Yeah—including that guy. Suck it. Fin.
In other 85 Broad news, a new anthropological study from Blogging Stocks’s Peter Cohan shows that Goldman Sachs apparently shows favoritism to the hairless, in terms of executive pay, which seems entirely plausible/reasonable to us. As our favorite Governor and erstwhile GS’er once said, “We consider ourselves to be a group. And, just so there’s no confusion, the follically-gifted who choose to go bald—which is to say those who shave their heads—have done so to be fashionable, and we don’t consider them to be a part of the bald community. So it's no dice for them on the $$$.” Make of that what you will.
Goldman's pot is even sweeter [Market Watch]
At Goldman, bald pate == big bucks [Blogging Stocks]

Related

News

Goldman Sachs Analysts Now Free To Leave The Nest Whenever Or Stay For The Ultimate Payoff

Back in May, we reported that there was a bit of tension between some growing first year analysts and higher-ups at Goldman Sachs. The issue was that the li'l fellas, antsy to leave the nest, were making arrangements with private equity firms and hedge funds for the following year, when they still had a little more than twelve months left until their two year commitment to GS was complete. And while Mama Lloyd and Papa Gar want nothing more than to see their babies succeed, they also felt like the kiddos were jumping the gun a little bit (and were in violation of the rule that when you live under their roof, you play by their rules, namely that no analyst shall take part in recruiting until six months from the time they’ve finished the two year program). To set an example, a bunch of particularly bad analysts were kicked to the curb and while it probably did put the fear of God into the others, who've remained on the straight and narrow ever since, it didn't make anyone very happy. So now this is happening: Goldman Sachs is doing away with two-year contracts for most analysts hired out of college, according to communications reviewed by The Wall Street Journal and confirmed by a Goldman spokesman. Analysts also won't get bonuses for completing the program, which has been around for a quarter of a century and has been viewed as a meal ticket to a lucrative Wall Street career. [...] The New York company's decision came after executives grew frustrated that many graduates weren't staying with the firm after completing the two years, and after Goldman fired a handful of analysts over the past year for signing on to work at other financial companies in violation of their contracts. Goldman has been reaching out to employees over the past two days to inform them of the changes, which will take effect for analysts who will start in 2013. "We think the historic two-year program is no longer the best approach for hiring and developing the careers of analysts in our banking and investment-management divisions," said the Goldman spokesman. "Making this change allows us to emphasize the longer-term career opportunities available atthe firm." No more fighting, no more sneaking around, no more need for anyone to put their foot down. If you want to leave after a year (or sooner), if you think you're grown up enough to make it out there on your own, by all means, go. That's your call and no one's gonna stop your or beg you to reconsider.* But if you decide you want to stay, be it for two years or twelve or twenty, Gary Cohn's thighs appreciate your commitment to the firm and look forward to working with you one day. Goldman Overhauls 2-Year Entry-Level Analyst Program [WSJ] Earlier: Goldman Sachs Does Not Look Kindly Upon First Year Analyst Who Plan In Advance *It's a mistake, of course, but it's yours to make.