Headline June 4th, 2012 / Going For Baroque

Going For Baroque

An end era was swirling up! Goldman's 440 partners were getting bonuses that year. Maybe in many cases not the 12 to 15 million each got in 2007 -more like packages worth 3 to 4 million, according to The New York Times, Goldman Sachs had 30,000 employees in all, so some of the company's overall 10.9 billion in compensation and benefits that year, were to go to assistants, junior analysts, and the like, who were to share a pool that 46% smaller than last year's.

But what's striking about the figure is that it's exactly as much as U.S. taxpayers just handed over to the firm. ''For Goldman Sachs to get billions in TARP money and then three months later pay out a fortune in bonuses...is political tone-deafness,'' says Richard Cellini, of Integrity Interactive, an adviser on corporate ethics and compliance. Goldman Sachs spokesman M DuVally disclosed that no TARP money went to bonuses: ''The compensation that was paid to employees came out of our business activities.''

Charles Geissi, Finance Professor and author of the book : Collateral Damaged: The Marketing Of Consumer Debt to America, begged to differ. ''If they didn't have TARP money, they would be forced to raise fresh capital,'' he says.'' Now, I agree its long term item on the balance sheet. 

But without the government money, they would have to take a dip into what operating profits they have left, and reduce those salaries. So the TARP money is a substitute. Theirs is a extremely disingenuous argument.'' Counters DuVally, ''Professor Geisst is wrong. We paid bonuses out of earnings, not capital.'' But as former compensation consultant, Graef Crystal, sums up such:: '' 

The argument of saying we're not using the bail out money is just crap because money's fungible. Money's money. It exposes them to ridicule.'' Just as hard to buy is the old mantra that Goldman has to pay staggering sums to its partners to keep them from being poached by other firms.

To date, some 200,000 jobs have been lost in the Financial sector many of them at the Executive level. Where are all those partners going to go now?? Three weeks after Blankfein's memo, John Mack too sent out a memo to Morgan Stanley worldwide: he too would forgo his bonus, as would his top lieutenants. 

The next 35 or so officers of the firm would have their compensation cut 65 to 75 percent. It was second year in a row that Mack had scrapped his own bonus Wall Street, that was pretty close to noble. So dear readers don't miss the coming posts!! With thanks to !WOW! 

Good Night And God Bless!

SAM Daily Times - The Voice Of The Voiceless


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