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Goldman sachs pays ceo record 40m Original Source Link: (May no longer be active)    http://www.bloomberg.com/apps/news?pid=20601103&sid=ao1sWwgLA_BM&refer=news http://www.bloomberg.com/apps/news?pid=20601103&sid=ao1sWwgLA_BM&refer=news Goldman Pays Chief Blankfein $53.4 Million 2006 Bonus (Update2) By Christine Harper Dec. 19 (Bloomberg) -- Goldman Sachs Group Inc. gave Chairman and Chief Executive Officer Lloyd Blankfein a $53.4 million bonus for 2006, setting a new high-water mark for Wall Street's top brass less than a week after Morgan Stanley paid John Mack a record $40 million. Goldman gave Blankfein $27.3 million in cash and $15.7 million in restricted stock. Blankfein, 52, also received options to buy Goldman shares that the firm valued at almost $10.5 million, according to a filing with the U.S. Securities and Exchange Commission today. Goldman awarded $150 million in bonuses to 11 other executive officers, including $25.7 million each to Co-Presidents Gary Cohn, 46, and Jon Winkelried, 47. Blankfein, who took over as CEO from Henry Paulson in June, led Goldman to $9.54 billion in net income for fiscal 2006, the fattest profits in the history of the securities industry. Even as Wall Street enjoyed its best year ever, none of Goldman's biggest rivals approached its earnings growth or the 58 percent gain in its shares. ``If you look at the price of Goldman Sachs stock over the last year or so, I think most of the shareholders would have no problem paying that bonus,'' said Eric Barden, chief investment officer of Austin, Texas-based Barden Capital Management, which holds Goldman shares. ``What Goldman Sachs has done over the last generation or so has really reshaped the entire financial-markets industry.'' Blankfein, who grew up in Brooklyn and joined Goldman as a metals salesman in 1982, received $38 million in total pay last year, almost as much as Paulson. His 2005 compensation included a $600,000 salary, $10.8 million in restricted stock, a cash bonus of $19 million and stock options valued at $7.2 million. Goldman's Mantra Paulson's 2005 restricted-stock bonus was $30.1 million, a record at the time. Goldman spokesman Lucas van Praag said Blankfein's salary remained $600,000 in 2006. ``The mantra that we have is one that dates back to the founding of the firm, that wealth creation for your clients and yourself is good, ostentation is appalling and philanthropy is expected,'' van Praag said. Goldman shareholders paved the way for bigger payouts in March, when they eliminated a $35 million cap on bonuses in cash and restricted stock. They also passed a new compensation plan for Goldman's top 25 executives that set the maximum bonus at 0.6 percent of pretax profit. This year, that amounts to $87.4 million each. The compensation committee of Goldman's board treats the bonus formula as a starting point and previously has awarded less than the maximum, according to the firm's Feb. 27 proxy filing. Tradition Dropped Blankfein didn't follow the tradition Paulson, 60, established as a Goldman CEO by taking all of his bonuses for the past three years in company stock. Blankfein also received some of his 2003, 2004 and 2005 bonuses in cash. This year, Goldman shares posted their biggest annual gain since the firm's 1999 initial public offering and the best performance in the 12-member Amex Securities Broker/Dealer Index. Net income for the fiscal year surged 70 percent, reaching $19.69 per share. Revenue also set a Wall Street record, climbing 49 percent to $37.7 billion. ``They had an outstanding year and nobody came close,'' said Gary Goldstein, CEO of New York-based executive-recruitment firm Whitney Group. The five biggest U.S. securities firms -- Goldman, Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. -- are handing out about $36 billion of bonuses this year. Goldman set aside as much to pay its 26,467 employees, $16.5 billion, as it generated in revenue in 2000. Average Pay In New York City alone, employees of the securities industry will receive $23.9 billion in bonuses this year, surpassing last year's record by 17 percent, New York State Comptroller Alan Hevesi forecast today. That works out to an average $137,580 this year, almost 2 1/2 times the average annual salary for the city's non-financial jobs, according to the report from Hevesi's office. Goldman's total pay averaged $622,000 per person. ``Because investment banking is so strong right now we're seeing very large paydays across Wall Street, and of course very large paychecks for those at the top of the firms,'' James Ellman, president of Seacliff Capital in San Francisco, which focuses on financial-services stocks. ``If the heads of the companies are generating very strong share performance, then investors really shouldn't have much to complain about.'' Last Updated: December 19, 2006 20:28 EST

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