This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Goldman Bonuses: Collateral Damage

NEW YORK ( TheStreet) -- Goldman Sachs' (GS - Get Report) executives deserve big bonuses, but those at most other banks do not.

That looks to be the message from Lloyd Blankfein, CEO of the mighty vampire squid, judging from comments he made at a banking conference in Frankfurt.

According to a Bloomberg report, Blankfein said multi-year contracts should be banned, and "clawbacks" should be instituted to stop executives from taking outsized risks with shareholder capital. No more setting the house on fire and walking away with the loot, in other words.

This is good news for shareholders everywhere, and it won't make much difference to Goldman, which doesn't often make mistakes. Paying its executives heavily in stock, as Blankfein proposes, ought to work out fine for them, as Goldman's stock pretty much only goes up anyway.

It is less good news for executives at Goldman competitors like Morgan Stanley (MS - Get Report) and JPMorgan Chase (JPM - Get Report), and especially ones like American International Group (AIG - Get Report) and Citigroup (C - Get Report), who have a record of screwing up and are owned largely by taxpayers.

The same can be said for the few legacy Merrill Lynch bankers still at Bank of America (BAC - Get Report). BofA is in trouble with New York Attorney general Andrew Cuomo, in part for failing to tell shareholders about bonuses paid to the Merrill bankers.

What a selfish guy, that Blankfein, suggesting bankers should actually have to make money for the companies they work for, rather than just for having fancy resumes! Is this the end of capitalism as we know it? Doubtful, but let's hope so.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AIG $56.94 -0.09%
BAC $15.62 -0.13%
C $52.92 0.04%
GS $197.02 -0.49%
JPM $62.59 -0.02%


DOW 18,083.91 +3.77 0.02%
S&P 500 2,113.51 -4.18 -0.20%
NASDAQ 5,068.4550 -23.63 -0.46%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs