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WSJ: Goldman: We Won't Slash Pay for '10

By JOE BEL BRUNO
FEBRUARY 10, 2010, 3:00 P.M. ET

Goldman Sachs Group Inc. manage to defuse public outrage over pay by slashing executive compensation in 2009, but Chief Financial Officer David Viniar said investors shouldn't use that as a proxy for 2010 pay.

Mr. Viniar, speaking to investors at a conference, said Wall Street's biggest investment bank will pay employees based on performance, the firm's overall profit level and the economic environment. He received a $9 million all-stock bonus in 2009, along with other top executives like Chief Executive Lloyd Blankfein. Those shares can't be touched for five years.

Mr. Blankfein's bonus for 2009 was a fraction of the $68.5 million payout he got in 2007. Big Wall Street bonuses have come under attack in Washington and among voters. Executives at Goldman have said that top employees should be paid fairly.

"People ask me if this is the new normal," Mr. Viniar said at a Credit Suisse conference in Miami. "There is no formula. We tried to strike the balance right, and we'll try to strike the balance right this year."

In 2009, Goldman made the smallest compensation payout relative to revenue in its history as a public company. But staffers hardly went home empty-handed; the firm set aside $16.9 billion for compensation and benefits and employees made an average of $500,000 per person.

.The lower-than-expected compensation numbers knocked Goldman's executives from being the highest paid in the industry. Rival J.P. Morgan Chase & Co. said CEO James Dimon would receive an estimated $17 million in stock, salary and share options for the year.

Mr. Viniar also put to rest continued speculation that Goldman might abandon its status as a financial holding company.

Goldman became a bank holding company at the height of the financial crisis, giving it Federal Reserve oversight. Goldman switched to a financial holding company in August, allowing the firm to participate in some businesses from which retail banks are restricted.

"I think right now as we look at the regulatory environment, changing our status is an unrealistic outcome," Mr. Viniar said.

Write to Joe Bel Bruno at [e-mail]


http://online.wsj.com/article/SB10001424052748704140104575057160739573530.html?mod=WSJ_newsreel_business