(BN) Goldman Decision to Boost Salaries Raises Concerns (Update1)
Started by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
Discussion about
sure there wont be any public outcry at all come bonus time Goldman Decision to Boost Salaries Raises Concerns (Update1) 2009-07-14 18:02:59.289 GMT (Adds Menendez, Crapo, Hoyer comments beginning in the third paragraph.) By Catherine Dodge July 14 (Bloomberg) -- Goldman Sachs Group Inc.’s decision to boost compensation and benefits by 33 percent on record earnings sparked disagreement among... [more]
sure there wont be any public outcry at all come bonus time
Goldman Decision to Boost Salaries Raises Concerns (Update1)
2009-07-14 18:02:59.289 GMT
(Adds Menendez, Crapo, Hoyer comments beginning in the
third paragraph.)
By Catherine Dodge
July 14 (Bloomberg) -- Goldman Sachs Group Inc.’s decision
to boost compensation and benefits by 33 percent on record
earnings sparked disagreement among lawmakers in Washington
about whether the awards are excessive, even after the firm
repaid rescue funds from U.S. taxpayers.
“It really makes the American people think, is it just
going to be business as usual with Goldman Sachs and much of
the rest of the financial industry?” said Senator Sherrod
Brown, an Ohio Democrat.
Fellow Democrat Robert Menendez, the Senator from New
Jersey, said he wasn’t troubled by the pay increase, now that
the New York-based bank has made taxpayers whole.
“What the private sector does without government money is
one thing,” said Menendez. “What the private sector does with
government money is another thing.”
Goldman Sachs, which returned $10 billion of U.S. bailout
money last month along with $426 million in dividends, said
today that second-quarter revenue from trading and stock
underwriting reached all-time highs. Net income was $3.44
billion, or $4.93 a share, 65 percent higher than during the
same period last year.
The firm, the fifth-largest U.S. bank by assets, set aside
$11.4 billion for compensation and benefits in the first half
of 2009, enough to pay each employee $386,429 for the six-month
stretch.
‘Restraint’
Brown, a member of the Senate Banking Committee, voted for
the $700 billion U.S. bank bailout last year. He said the
financial services industry is already trying to “weaken the
president’s proposal” to revamp regulations.
Lawmakers are beginning to draft legislation that would
implement President Barack Obama’s proposal to overhaul U.S.
financial rules and prevent a repeat of last year, when the
collapse of Lehman Brothers Holdings Inc. and American
International Group Inc. froze credit markets and worsened the
global recession.
Other lawmakers of both parties said Goldman’s increased
compensation is a sign that the economy is heading in the right
direction.
“Obviously, we should not be utilizing taxpayer dollars
for excessive compensation, but I think the larger issue is the
question of how the economy is performing,” said Senate
Banking Committee member Michael Crapo, an Idaho Republican.
“If their results this morning have shown at least one bright
light in that context, I think that’s the best news we could
have asked for.”
‘Make Profits’
And House Majority Leader Steny Hoyer, a Maryland
Democrat, said he wants “all the people we gave money to to
make profits” and “pay the money back with interest and have
a net zero cost to our program.”
Senator Jon Tester, a Montana Democrat on the banking
panel who opposed the bailout, sounded a note of caution for
Goldman.
“It’s good they had a good quarter, but I’m not happy
about the whole compensation thing,” said Tester. “We’ve been
down this road once before,” Tester said, referring to the
controversy over bonuses paid by another recipient of
government funds, New York-based AIG.
“We’re not out of the woods economically,” Tester said.
“Quite frankly, they need to look at it from a perspective
that it’s not business as usual anymore, and they can’t
continue along these lines or there will be outrage.”
James Reynolds, chief executive officer of Loop Capital
Markets LLC in Chicago, said criticism of Goldman Sachs’s
success was misplaced.
“This is what the government investment was meant to
do,” Reynolds said in an interview. “I just don’t understand
why the country, or a working person in Michigan, Ohio or
Kansas, would cheer against Goldman doing well just because the
government invested in Goldman at a time when the financial
markets were in chaos.”
For Related News and Information:
Goldman Sachs earnings: GS US TCNI ERN
Goldman Sachs financials: GS US FA
Top finance news: FTOP
Goldman Sachs events: GS US EVT
Features about Goldman Sachs: GS US TCNI FEA
Bloomberg Multimedia Events: AV
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Response by The_President
about 17 years ago
Posts: 2412
Member since: Jun 2009
the govt. cannot tell what GS can do with their money now that they have re-paid their TARP. This article is complete nonsense. Where was the govt. outrage when the retiring CEO of Exxon Mobil got a $400 million retirement package a few years ago?
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
when does the government ever make sense ? all I know is that come december theres gonna be alot of scrutiny over comp...tarp or non tarp..Obama will pull any trick he can to make sure sanata skips wall st.
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Response by ericho75
about 17 years ago
Posts: 1743
Member since: Feb 2009
I've said this almost 2 months ago we will be seeing record bonuses being handed out by GS.
As of last quarter there are 31,000 full time employees in GS. They are expecting an average of 500K bonus come Christmas. My guess is this will directly affect the low to middle tier of housing in NYC.
Let's see what Morgan's number look like.
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Response by ericho75
about 17 years ago
Posts: 1743
Member since: Feb 2009
If the government isn't getting the 13 billion back from the AIG CDS payout, there's no way in hell they can stop this compensation payout. No way in hell.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
do you really think that 31,000 people will get paid 500k each ?
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Response by ericho75
about 17 years ago
Posts: 1743
Member since: Feb 2009
ahhh...no, but that's the reported average.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
90% of that pool is going to 10% of the workers.
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Response by carnegie
about 17 years ago
Posts: 166
Member since: Mar 2009
marco_m, as it has in the past. Your argument doesn't make any sense. This is the same as in the boom years.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
"This is the same as in the boom years. "
wow. you must either work in RE or be heavily invested because you have definitely left reality.
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Response by InFamous
about 17 years ago
Posts: 221
Member since: Jun 2009
The bears have been arguing that the 'big' bonus years are gone and it will have a direct affect on NYC prices. Now reports are that GS will hand out record bonuses and the bears are arguing that it's not going to mean a thing? Oh give us a break!
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Response by InFamous
about 17 years ago
Posts: 221
Member since: Jun 2009
At least be consistent. You think this is burger king, have it your way? Bears need to get real.
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Response by carnegie
about 17 years ago
Posts: 166
Member since: Mar 2009
marco_m, you are dense. My point was that when real estate was at its highest "90% of pools were going to 10%" as well. My point is this didn't hinder real estate to be sky high for any type of property.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
GS probably will have a record year ..most of the surviving big firms are killin it so far this year no doubt. and I hope my comp goes up..but its still gonna be a far cry from 2007. then it still comes down to the fact that people are gonna save...not buy apartments. we'll see what happens
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Response by carnegie
about 17 years ago
Posts: 166
Member since: Mar 2009
marco_m, actually not. A few banks have represented internally that bonuses will be at 2007 levels.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
and we'll see what really happens come december. Ill be fine eiether way. will you ?
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
"A few banks have represented internally that bonuses will be at 2007 levels."
right..because the year is over and they know what the pool is. ok....
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Response by carnegie
about 17 years ago
Posts: 166
Member since: Mar 2009
marco_m, obviously assuming nothing is going to blow up. You really have no idea. At this point banks are doing damage control. People have made a lot of money for the banks and want to know where they stand.
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Response by carnegie
about 17 years ago
Posts: 166
Member since: Mar 2009
and yes, I am fine. My apartment is paid down. And we are double-income, both still employed.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
then I guess come december one of us will owe the other a huge apology. and i hope ur right cuz that means Im gettin paid. but if Im right, theres gonna be some hurtin folks round these parts
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Response by lr10021
about 17 years ago
Posts: 175
Member since: May 2007
folks...a lot of money is going to go out the compensation door at goldman and a few other firms. But what is misplaced is that there are very few firms left that are in a position to pay out these kinds of sums. And I haven't heard that Goldman is hiring again (I think it laid off about 10-15 pct of it's workforce). So that is a lot less people getting the big money.
In the next decade, new firms will appear and fill the gaps that lehman, bear, merrill, wamu, wachovia, citigroup, etc, opened up.
But until then, you can be sure that the obama administration is going to be a net negative on this front, and that the real growth won't happen until wall street is not a bad word anymore.
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Response by nyc10022
about 17 years ago
Posts: 9868
Member since: Aug 2008
"The bears have been arguing that the 'big' bonus years are gone and it will have a direct affect on NYC prices. Now reports are that GS will hand out record bonuses and the bears are arguing that it's not going to mean a thing?"
infamous shill conveniently leaves out that, uh, there are some other banks. Fewer, of course. But some of the money just moved from lehman, etc.
If all the other banks are doing poorly (which all the articles about goldman seem to be saying), pointing only at Goldman is a pretty shill move.
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Response by nyc10022
about 17 years ago
Posts: 9868
Member since: Aug 2008
And, the problem that the Goldman thing might be temporary, its its primarily trading profits....
what pisses me off is that without the bailout all these firms would be practically out of business and ny real estate would probably be at 50% of where it is now........but since we the taxpayers bailed them out, what do we get....NADA......and i still cant afford nyc real estate....who will bail me out? answer NO ONE!
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Response by gaving
about 17 years ago
Posts: 1
Member since: Jul 2009
mhillqt please dont seek pity. Goldman as a company makes money. So they can pay their people, they can keep it in the bank or they can make a dividend, or they could buy another company and have more business. If they don't pay their people, all the value goes to the owners of the company, the people who were responsible for hiring the people at the company.
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Response by Mhillqt
about 17 years ago
Posts: 405
Member since: Feb 2007
Im not seeking pity...im just SHOCKED at how MUCH taxpayer money went to bail out these firms that would have failed.............but no one and i mean no one bails out the little guy who makes a bad investment decision.....
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Response by nycbuyer1
about 17 years ago
Posts: 108
Member since: May 2009
The government has been trying to bail out a lot of little guys through loan modifications. People who took on mortgages that they could not afford have been after a bailout too. Granted not all of them will get them. Of course, not all of the companies got them.... Lehman, BS....
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Response by Mhillqt
about 17 years ago
Posts: 405
Member since: Feb 2007
The govt isnt bailing out people who lost 75% of their retirement in these bad investments pedaled by companies like Goldman....I thought this was a free market......so when things are good and booming, we have to pay high prices for real estate etc but when these companies fail, we the taxpayers bail them out and still pay high prices for real estate in manhattan....so where is the RISK for them....its like a WIN WIN..
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Response by McHale
about 17 years ago
Posts: 399
Member since: Oct 2008
Goldman Sachs makes me want to vomit. They are some of the most vile greedy scumbags on the planet. They lie cheat and steal in order to make money, but you have to admit they are pretty damn good at it.
Let's not forget, Goldman still has housing bubble skeletons in the closet in the form of many worthless level 3 assets. However, as long as the government doesn't force them to mark to market, does it really matter?
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Response by bjw2103
about 17 years ago
Posts: 6236
Member since: Jul 2007
"If all the other banks are doing poorly (which all the articles about goldman seem to be saying), pointing only at Goldman is a pretty shill move."
the real gold mine is in the per word translation industry. I hear that you can bill 87 hours per day and make over $2500 per day. I am learning to translate!
the govt. cannot tell what GS can do with their money now that they have re-paid their TARP. This article is complete nonsense. Where was the govt. outrage when the retiring CEO of Exxon Mobil got a $400 million retirement package a few years ago?
when does the government ever make sense ? all I know is that come december theres gonna be alot of scrutiny over comp...tarp or non tarp..Obama will pull any trick he can to make sure sanata skips wall st.
I've said this almost 2 months ago we will be seeing record bonuses being handed out by GS.
As of last quarter there are 31,000 full time employees in GS. They are expecting an average of 500K bonus come Christmas. My guess is this will directly affect the low to middle tier of housing in NYC.
Let's see what Morgan's number look like.
If the government isn't getting the 13 billion back from the AIG CDS payout, there's no way in hell they can stop this compensation payout. No way in hell.
do you really think that 31,000 people will get paid 500k each ?
ahhh...no, but that's the reported average.
90% of that pool is going to 10% of the workers.
marco_m, as it has in the past. Your argument doesn't make any sense. This is the same as in the boom years.
"This is the same as in the boom years. "
wow. you must either work in RE or be heavily invested because you have definitely left reality.
The bears have been arguing that the 'big' bonus years are gone and it will have a direct affect on NYC prices. Now reports are that GS will hand out record bonuses and the bears are arguing that it's not going to mean a thing? Oh give us a break!
At least be consistent. You think this is burger king, have it your way? Bears need to get real.
marco_m, you are dense. My point was that when real estate was at its highest "90% of pools were going to 10%" as well. My point is this didn't hinder real estate to be sky high for any type of property.
GS probably will have a record year ..most of the surviving big firms are killin it so far this year no doubt. and I hope my comp goes up..but its still gonna be a far cry from 2007. then it still comes down to the fact that people are gonna save...not buy apartments. we'll see what happens
marco_m, actually not. A few banks have represented internally that bonuses will be at 2007 levels.
and we'll see what really happens come december. Ill be fine eiether way. will you ?
"A few banks have represented internally that bonuses will be at 2007 levels."
right..because the year is over and they know what the pool is. ok....
marco_m, obviously assuming nothing is going to blow up. You really have no idea. At this point banks are doing damage control. People have made a lot of money for the banks and want to know where they stand.
and yes, I am fine. My apartment is paid down. And we are double-income, both still employed.
then I guess come december one of us will owe the other a huge apology. and i hope ur right cuz that means Im gettin paid. but if Im right, theres gonna be some hurtin folks round these parts
folks...a lot of money is going to go out the compensation door at goldman and a few other firms. But what is misplaced is that there are very few firms left that are in a position to pay out these kinds of sums. And I haven't heard that Goldman is hiring again (I think it laid off about 10-15 pct of it's workforce). So that is a lot less people getting the big money.
In the next decade, new firms will appear and fill the gaps that lehman, bear, merrill, wamu, wachovia, citigroup, etc, opened up.
But until then, you can be sure that the obama administration is going to be a net negative on this front, and that the real growth won't happen until wall street is not a bad word anymore.
"The bears have been arguing that the 'big' bonus years are gone and it will have a direct affect on NYC prices. Now reports are that GS will hand out record bonuses and the bears are arguing that it's not going to mean a thing?"
infamous shill conveniently leaves out that, uh, there are some other banks. Fewer, of course. But some of the money just moved from lehman, etc.
If all the other banks are doing poorly (which all the articles about goldman seem to be saying), pointing only at Goldman is a pretty shill move.
And, the problem that the Goldman thing might be temporary, its its primarily trading profits....
http://blogs.wsj.com/deals/2009/07/14/is-goldmans-magically-large-profit-a-one-quarter-wonder/
see last 6 posts:
http://www.streeteasy.com/nyc/talk/discussion/12513-the-new-renter-hallucination-prices-are-going-to-fall-50-because-db-says-so
what pisses me off is that without the bailout all these firms would be practically out of business and ny real estate would probably be at 50% of where it is now........but since we the taxpayers bailed them out, what do we get....NADA......and i still cant afford nyc real estate....who will bail me out? answer NO ONE!
mhillqt please dont seek pity. Goldman as a company makes money. So they can pay their people, they can keep it in the bank or they can make a dividend, or they could buy another company and have more business. If they don't pay their people, all the value goes to the owners of the company, the people who were responsible for hiring the people at the company.
Im not seeking pity...im just SHOCKED at how MUCH taxpayer money went to bail out these firms that would have failed.............but no one and i mean no one bails out the little guy who makes a bad investment decision.....
The government has been trying to bail out a lot of little guys through loan modifications. People who took on mortgages that they could not afford have been after a bailout too. Granted not all of them will get them. Of course, not all of the companies got them.... Lehman, BS....
The govt isnt bailing out people who lost 75% of their retirement in these bad investments pedaled by companies like Goldman....I thought this was a free market......so when things are good and booming, we have to pay high prices for real estate etc but when these companies fail, we the taxpayers bail them out and still pay high prices for real estate in manhattan....so where is the RISK for them....its like a WIN WIN..
Goldman Sachs makes me want to vomit. They are some of the most vile greedy scumbags on the planet. They lie cheat and steal in order to make money, but you have to admit they are pretty damn good at it.
Let's not forget, Goldman still has housing bubble skeletons in the closet in the form of many worthless level 3 assets. However, as long as the government doesn't force them to mark to market, does it really matter?
"If all the other banks are doing poorly (which all the articles about goldman seem to be saying), pointing only at Goldman is a pretty shill move."
Maybe not after all. JP Morgan following suit:
http://www.nytimes.com/2009/07/17/business/global/17bank.html
the real gold mine is in the per word translation industry. I hear that you can bill 87 hours per day and make over $2500 per day. I am learning to translate!