Remember back in November, when the public’s outrage with Wall Street in general and Goldman Sachs in particular led the firm – which claimed to be doing “God’s work” – to forego bonuses for its top seven executives?
Well, it turns out they weren’t exactly telling the truth.
Goldman Sachs CEO Lloyd Blankfein and his cronies hardly suffered from this obvious public relations stunt. Blankfein alone received $68.5 million in salary and bonuses the year before, so one would think he could somehow manage to pinch pennies – maybe by dining out a little less or postponing a few home improvements – and make that 2008 payment stretch throughout 2010.
But no. Reuters reports:
Blankfein received $18.7 million in distributions from investment funds open to executives and employees of the firm, according to a regulatory filing on Friday.
Goldman Chief Operating Officer Gary Cohn received $15.1 million, Chief Financial Officer David Viniar $11.5 million, and former President and Chief Operating Officer Jon Winkelried $9.8 million, the filing said.
The funds managed by Goldman Sachs are available to clients, and certain executives and other employees. The funds invest in private equity, venture capital and other assets.
The distributions came to $55.1 million, more than double the $24.2 million total in 2008 when $9.6 million went to Blankfein, $6.3 million to Cohn, $5.1 million to Viniar and $3.2 million to Winkelried.
But according to the regulatory filing, Goldman’s top executives were able to make up for the disappointing bonuses with millions of dollars in distributions from the internal investment funds.
In the run-up to 2008’s economic crisis and our ongoing recession, Wall Street executives paid themselves outrageous salaries and bonuses while taking irresponsible risks with shareholder dollars. The bigger risks they took, the bigger profits – and bonuses – they could possibly reap. These risks led ultimately to Lehman Brothers’ implosion and the subsequent transfer of hundreds of billions in taxpayer money to financial titans to prevent “too-big-to-fail” firms from collapsing and, as the story goes, taking down the rest our economy with them.
And yet the outrageously obscene Wall Street compensation practices that led to the crisis continue – even among those firms who thought they could wrangle some good p.r. out of not paying themselves anything.
Enough is enough. If Goldman Sachs and the rest are going to keep giving themselves humongous bonuses, these bonuses should be taxed to help fund job creation, foreclosure prevention and other projects to help stabilize the economy. The “too-big-to-fail” firms should be broken up, and policies moving forward in Washington should prioritize encouraging economic prosperity and sustainability.
Because we sure can’t go on like this.