Shareholders Challenge Goldman Sachs As It Prepares To Pay Bonuses

Goldman Sachs is issuing its much anticipated earnings announcement tomorrow, with some expecting it to set aside up to $20 billion for executive bonuses.   Here’s one response that we just heard about:

 
The Nathan Cummings Foundation and the Benedictine Sisters of Mt. Angel, Oregon, announced today that they have filed a shareholder resolution urging the Goldman Board to review pay disparity at the company and analyze the appropriateness of its spiraling pay packages – packages that have an unprecedented impact on Wall Street compensation in general
 
The resolution, which the two entities expect to gather more co-sponsors, was filed to appear in the 2010 proxy and be voted on at the stockholder’s meeting. Goldman Sachs had received resolutions calling for shareholders to have an advisory vote on executive compensation that received a 46 percent vote in favor. 
 
Laura Shaffer, who is director of shareholder activities of the Nathan Cummings Foundation and one of the resolution’s sponsors, stated: “This request is especially timely as Goldman Sachs rushes to pay huge bonuses, setting an example that many Wall Street firms will no doubt strive to emulate. As shareholders, the ripple effects of this extraordinary compensation are especially concerning. Executive compensation accounts for a considerable portion of aggregate earnings and as firms like Goldman hand over ever larger sums to their executives, these spiraling pay packages will have increasingly significant impacts on investors’ returns.”
 
Sister Judy Byron, who coordinates the faith-based Northwest Coalition for Responsible Investment and is a longtime proponent of this resolution, said: “Goldman Sachs’ announcement of record bonuses is a stark reminder about how executive compensation is spiraling out of control for many firms. It is important that citizens and shareowners both act as voices of reason. As Fortune reminded us in 2007, top executives earn 364 times the pay of the average worker. CEO pay increases significantly for many executives even in rough times, while layoffs skyrocket and pay for average employees stagnate." 
 
Laura Berry, executive director of the Interfaith Council on Corporate Responsibility, said: “As prudent investors, we have a responsibility here to act as the conscience of Wall Street, especially when it fails to do so on its own. How is it possible that the year after billions of taxpayer’s dollars helped companies like Goldman Sachs return to financial health, this company shows absolutely no restraint? Goldman Sachs is poised to become the poster child of the company that drives income disparity in the United States.”