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Tuesday, February 27, 2024

Goldman’s Powerpoint Defending Multi-Million Dollar Bonuses

Courtesy of Tyler Durden

When Goldman releases a public powerpoint defending its compensation practices and its soon to be disclosed multi-million dollar bonuses, you know that the firm is expecting a firestorm once the proxy is released and leaks about what top traders receive come out.

Here is how Goldman defends it bonus, now apparently known as discretionary compensation:

Attract and Retain Talent

  • Our compensation framework is designed to attract and retain the most talented human capital, which has been a key contributor to generating excess returns relative to peers

Align Compensation with Results, Particularly for Senior Management

  • To avoid misaligning compensation and performance, we do not award multi-year, guaranteed employment contracts
  • Senior and more highly paid employees experience more variability in their compensation based on year-to-year changes in our firm’s results

Evaluate Performance Over Time

  • Compensation, in most cases, includes discretionary compensation, as appropriate, awarded at year-end
  • The percentage of compensation awarded in equity increases as an employee’s total compensation increases
  • Equity awards are subject to vesting, transfer and other restrictions over a extended period of time, including recapture provisions

Discourage Excessive or Concentrated Risk Taking [oh THIS IS RICH]

  • The risk/return profile of one’s business is taken into account in individual compensation determination
  • Revenue producers do not determine the compensation of risk managers
  • No employees compensated based on a fixed percentage of earnings
  • Align Employee and Shareholder Interests

  • Our compensation policies encourage employees to think and act like long-term shareholders. Being significantly invested in our stock over time, as part of an individual’s compensation, advances our partnership culture of stewardship for our firm

Somehow omitted from all of this is the key premise: raping the middle class repeatedly, over and over, without the benefit of any dollar collapsing lubrication

Some of the amusing charts that will have no power whatsoever to prevent Congress from clawing back bonuses when the house of card equity market finally collapses are presented below.

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