Goldman Sachs, Shareholders Just Can't Get Along

Goldman Sachs's employee compensation policy stipulates that "employees should think and act like long-term shareholders." Which is why we can expect the investment bank's workers to give themselves a nice, fat pay cut.

After all, that's what some of the company's big shareholders seem to want, according to the WSJ, presumably in hopes of giving themselves a nice, fat pay raise.

But wait a sec -- if employees cut their pay, boosting the value of Goldman shares, which will increase their pay, won't that send all of the firm's key bonus babies squalling in protest to some less stingy bank that has the good sense to make workers think and act more like short-term shareholders?

Plus, that appears to conflict with another Goldman policy stating that "compensation should reward an individual's ability to identify and create value, enhance the firm's culture of compliance and its reputation, and build and nurture a dedicated client base." Because, obviously, how can said individual be expected to create value if they're so demoralized by that nice, fat pay cut that they quit, thus destroying value?

Look, I'm no expert, but I question whether that would do anything whatsoever to enhance the firm's culture of compliance and nurture a dedicated client base. And here's the really tricky part. As Goldman CEO Lloyd Blankfein sagely pointed out at a recent conference, "Culture encourages commitment to public service and community." You can say that again. Why, just the other day Goldman pledged $500 million worth of remedial education classes for small businesses, which you just know don't have a clue about how to enhance a culture of compliance, poor things. If you think about it, that's more than 1 percent of the $14 billion Goldman collected when it and a bunch of other banks threatened to swirly Tim Geithner unless he paid out every last dime of what AIG owned them for those two-bit credit default swaps.

Still, I guess I can see where those shareholders are coming from. Why should Goldman get to keep all the loot? Seems only fair that investors get their cut. After all, shareholders are at risk too, you know. Let's say for a moment that the government wouldn't rush to Goldman's aid if Blankfein had to wait in line for a swine flu shot like all the other schmucks -- I know, I know, crazy talk, but indulge me -- don't you think those shareholders would be, like, freaked out and stuff?

It's all very confusing. I think Goldman execs and Goldman shareholders and ex-Goldman employees in high government office should all just take a breath, close their eyes (and if some of them want to join hands just to get the vibe going, that's OK too) and think about something: They've all got a pretty good thing going here. Let's not let a little dispute over money kill the Goldman goose.