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Goldman Sued for Overpaying Executives

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CBS
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The pension fund for an electrical workers' union wants to pull the plug on large executive compensations at Goldman Sachs, filing a lawsuit against the bank in a Delaware court.

The International Brotherhood of Electrical Workers pension fund said the bank allocates about 47 percent of its 2009 revenue toward compensation, according to the Reuters news agency. The lawsuit aims to recoup some of the compensation for Goldman shareholders, saying the payments "vastly overcompensate management and constitute corporate waste."

Last week, Goldman said it would limit its compensations for last year at a 36 percent ratio or $16.2 billion. In early February, Goldman revealed it would pay CEO Lloyd Blankfein a $9 million stock bonus for 2009.

The lawsuit also directly targets Blankfein, saying that he and other executives should be in charge of allocating charitable donations the bank pledged as a way to make amends for its behavior. The bank's shareholders are now responsible for making decisions about those donations.

"We believe the lawsuit is completely without merit," Goldman spokesman Ed Canaday told the news outlet. A lawyer for the union's pension fund did not return a Reuters phone call.

Goldman took money from the federal government's bank bailout in 2008, but the bank has since paid back the money with interest and recorded record profits.

The lawsuit was filed in Delaware Chancellery Court.

  • Alex Sundby

    Alex Sundby is an associate news editor for CBSNews.com