Goldman CEO’s Pay Up 14.5% in 2011

by Christopher Freeburn | April 13, 2012 3:18 pm

Goldman CEO’s Pay Up 14.5% in 2011

Critics of Lloyd Blankfein are likely to have a field day over the disclosure of his pay package[1] for last year.

Reuters reports that the Goldman Sachs (NYSE:GS[2]) chairman and CEO’s annual compensation for 2011 was $16.2 million, up 14.5% from the previous year.

While Blankfein made more money, Goldman investors made less. The company posted a $2.5 billion profit in 2011, down significantly from $3.6 billion the year before. During the year, its shares slid 46%. The firm also laid off thousands workers as its numbers fell, Reuters noted, and trimmed its average employee salary by 15%.

Blankfein received only $12 million for his performance as CEO, a 35.5% reduction from $18.6 million 2010. The remainder of his compensation came from stock awards from prior years that vested in 2011 and other perks and benefits, like insurance and a chauffeured car. His salary was a mere $1.8 million for the year.

By comparison, Morgan Stanley (NYSE:MS[3]) CEO James Gorman raked in a total of $13 million in 2011. But that was a decline of 14.5% compared the year before. Like the breakdown for Blankfein, most of that represented performance pay and stock awards added to Gorman’s relatively modest $800,000 salary.

Internal critics at Goldman are pushing for change. In SEC filings, the company laid out an executive compensation program offered by John Harrington, a shareholder. Under Harrington’s plan, top executives at the company would be required to maintain 75% of their company stock for a minimum of three years after leaving the firm. Reuters reported that Goldman is urging shareholders to vote down Harrington’s proposal.

Goldman SEC filings also revealed that President and COO Gary Cohn, CFO David Viniar, vice chairman J. Michael Evans, and vice chairman and head of investment banking John Weinberg each received $11.85 million in performance pay last year. That included $1.85 million in salary and a $3 million bonus for each executive. Including stock awards from prior years, all four executives made at least $15.7 million last year.

2011 was a very good year for executive pay[4], leaving many concerned about the exorbitant compensation CEOs pull in. While Blankfein’s $16.2 million may sound high, it pales in comparison to the $68.8 million[5] received by Starbucks (NASDAQ:SBUX[6]) CEO Howard Schultz last year. Of course, Starbucks had a good year financially in 2011, and its stock is now at 52-week highs.

Endnotes:
  1. pay package: http://www.reuters.com/article/2012/04/13/us-goldman-compensation-idUSBRE83C0UP20120413
  2. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  3. MS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MS
  4. good year for executive pay: http://investorplace.com/2012/04/ceos-made-out-like-bandits-in-2011/
  5. $68.8 million: http://investorplace.com/2012/01/starbucks-ceo-howard-schultz-compensation/
  6. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX

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