Goldman Sachs Group, Inc. (NYSE:GS) recently announced that CEO Lloyd Blankfein took $12.4 million in total compensation for 2011 which is down 35% from 2010, when he earned $19.1 million. The pay cut comes after the bank posted lower profits and share price. The CEO received $2 million in actual salary, $3 million bonus and $7 million in restricted stock, as well as $449,600 worth in other benefits.
Compared to his peers, Blankfein’s payment is on the low end. Citigroup CEO Vikram Pandit saw a $15 million pay package; JP Morgan CEO Jamie Dimon saw his total pay come in at $23 million.
As for CFO David Viniar, COO Gary Cohn, and Vice Chairmen Michael Evans and John Weinberg, they each saw a total payment of $11.85 million.
Goldman has not been performing on the level that we are used to seeing. Since the financial crisis, the investment bank has struggled with keeping good margins and legal battles. Not to mention the government has been keeping an eye on them as well, occasionally ordering the firm to pay a fine for misconduct.
The reason why Blankfein saw a 35% cut in his pay was because Goldman saw a 47% drop in earnings and its stock fell 46%. That is not the kind of results you want to be posting. To be fair, 2011 was particularly a rough year for investors and banks. A solid chunk of Goldman’s drop in earnings was due to the unfriendly market conditions. Goldman did pass the Fed’s stress test which is a relief but the firm has not fully recovered from last year.
The firm has faced several unfortunate setbacks in recent months though, starting with the departure of two high level executives, which left the firm early this year. Greg Smith made a larger impact by writing a piece on why he left, saying the bank had “no morals and didn’t care about the customer”.
Earlier this week, Congressional Democrats came out and blamed Goldman Sachs for the increased oil prices. They singled out Goldman Sachs and failed to mention speculators at other institutions which just shows that they clearly don’t know what they are talking about. Traders at Goldman Sachs alone have not increased the oil prices. Democrats are just upset that President Obama and his administration have not dealt with the Iranian situation properly, that is your fault not Goldman’s. Bottom line, times are a little rough for Goldman and if this keeps up you can expect Blankfein to take a pay cut again this year.