Goldman Sachs CEO Wants Reform Of Exec Pay

(CBS/AP)  The chief executive of Goldman Sachs Group Inc. on Tuesday called for new standards on how Wall Street executives are compensated and new regulation of large hedge funds and private equity funds.

Lloyd Blankfein said lessons from the financial crisis include the need to "apply basic standards to how we compensate people in our industry" and to set forth specific guidelines on pay.

Blankfein also said unregulated pools of capital that are big enough to potentially burden the financial system in a crisis should be put under "some degree" of government oversight. Those would include large hedge and private equity funds.

Throwing regulatory reins around hedge funds - which largely escape government supervision and draw hundreds of millions of dollars from pension funds, charities, university endowments and wealthy individuals - is a central notion in efforts to revamp the nation's financial rule book spurred by the global economic crisis.

The Obama administration recently presented a plan to Congress that would require larger hedge funds, and other private pools of capital like private equity and venture capital funds, to register with the Securities and Exchange Commission. Such a move would open their books to federal inspection.

Blankfein spoke to a conference of the Council of Institutional Investors, a group representing public, corporate and union pension funds that together have an estimated $3 trillion in assets.

"Much of the past year has been deeply humbling for my industry," he said, acknowledging it could take years to rebuild the investor confidence lost in the crisis caused partly by industry practices that appear "self-serving and greedy in hindsight."

Last November Blankfein and six other Goldman Sachs executives announced they were not going to accept cash bonuses, stocks or options for 2008 beyond their salaries.

In 2008 Blankfein earned $600,000 in salary and $277,828 in stock rewards deferred from prior years, according to Goldman Sach's financial statement released last month.

Although Blankfein's salary as CEO was the same in 2007, his compensation that year also included a $25,985,474 bonus, $25,013,753 in stocks, $16,440,188 in options, $780 for change in pension value, and $382,157 in other categories. His total compensation in 2007 was $70,324,352.

New York City-based Goldman Sachs said recently it hopes to return its $10 billion investment from the government under the financial bailout program as soon as possible.

[emperorlotku]

"The politicians are in total bed with them (a-la the Keating 5 or 7) of the Reagan era. Of the media is too busy covering the Madonna adoption story to do any research on this."


No kidding the media is up to their necks in this mess also. We learn more about Paris Hilton, Lindsey Lohan, Madonna and what Michelle Obama is wearing than we do serious news. Most of these reporters have graduated from the Joseph Stalin School of Professional Journalism, havn't a clue on how to state the facts in a centrist professional manner, These so called journalists are the reason newspapers are failing . The only produce sizzle stories, no steak stories. They don't do serious impartial investigative news reporting, every major media outlet has the same stories, almost word for word, and they never dig into the corruption. Look at the Roland Burris story. That scumbag is still in office because the news agencies with the attention span of 2 days has dropped the story to cover what Michelle Obama is wearing when she's in Europe. We don't have news agencies and they certainly failed us when the Democrats and Republicans tanked our economy.

[noloyalisti]

We also need to get rid of civil rights for corporations, that is ridiculous. They exist for the benefit of the people. As soon as they start doing anything that harms anyone, here or overseas, we shut them down. And they don't get to give contributions to politicians or PACs. And if they do false advertising or bad marketing we take away their speech.

[tincup356]

What has America come to be? How can the people be proud at what a mess our leaders have made? even worse......how can you trust a government that will not care about the people that pay the bills through taxes and elect them to the job? Where has the help gone ?,,,,,, Billions to corrupt corporations ...... while the people that have lost everything..... get an extra 13 dollars a week in tax breaks........The people of this country mean NOTHING to those greedy power brokers that are supposed to be representing us.......they are indeed lucky that the masses have not started marching on Washington in numbers....but that too is a YET...which stands for ......YOUR ELIGIBLE TOO.

[whitemale08]

A thief who steals a 100 bucks and gives back $10.00 is not good enough.

These crooks at Goldman Smacks have to give back every penny they looted from the tax payer for these worthless toxic derivatives and credit-default swaps they got through AIG.

Then these clowns need to march into the BIG HOUSE and sentenced for life like Madoff.

And former Treasury Sect. Hank the Snake Paulson needs to be investigated for conflict of interest, found guilty for malfeseance and racketeering hauled off to jail.

[lami987]

Goldman's CEO sure sounded like an angel. He now knows Obama's administration is going to regulate his industry and there is no way out of it. So he sounds a different tune. Please be assure other CEOs would come out and sound the same tune. They are a bunch of thiefs. All of them belong in jail more than anywhere else.

[sjc_1]

Goldman was one of the first banks to be made whole. They had a lot of CDOs backed by CDSs with AIG. When Paulson got involved, he wanted to preserve the value of his Goldman stock, so they got covered. Can you say Conflict of Interest?

[talk_down_2_you]

These liars are criminals. They lied about the loans they gave triple-A ratings, leveraged them at 30:1 and destroyed the real housing markets and most of the economy. They've lied all the way to the bank and now we are giving them billions to cover their crimes.

The politicians are in total bed with them (a-la the Keating 5 or 7) of the Reagan era. Of the media is too busy covering the Madonna adoption story to do any research on this.

Please see the Bill Moyers Journal April 6 episode for the best coverage of this so far in the USA. At least PBS is willing to do some research instead of being told what to read in their newscasts.

[Resin-Smoker]

Movn1,

After i made $70,324,352, i'd suddently grow an ethical backbone... Hell, at that point the world could fall apart so long as my arse was covered.

[afmcalax]

After earning $27 MILLION in a 2007 bonus why would he even need to take a salary for the rest of his life? Exactly how much money does a person need to live? The salary these people got was just a game to them. Ego driven and one upmanship -- it never had any basis in reality. And then the Republicans came along and gave them a tax break!

Deals were made to generate fees and decrease competition not to better the economy or society. We should not try to control companies that get to big to fail; we should never let them get that big to begin with. That is the true lesson from this economic catastrophe.

[Movn1]

Finally, a banker who has some ethical backbone. Thank you, Mr. Blackfein, for your brave declaration. I hope others take note and follow your lead.