In a report Monday, the firm said the investment bank failed to align pay with performance, a concern it raised last year even though it ultimately approved last year's plan.
"Shareholders should be concerned with this disconnect particularly as this is the second year in a row the Company has paid more than its peers while performing somewhat worse, based on our pay for performance analysis," the report said. "A properly structured pay program should motivate executives to drive corporate performance, thus aligning executive and long-term shareholder interests."
"While we did not recommend shareholders vote against the Company's say on pay last year despite the misalignment of pay and performance, in light of the Company's continued failure to align executive pay with performance, as well as our serious concerns with the issues listed above, we believe shareholders should vote against the Company's executive compensation program," the report added.Glass Lewis also once again recommended that shareholders vote against the election of director James Johnson, the chair of the compensation committee. The report highlighted Johnson's "poor history of oversight" as former CEO of bailed-out housing giant Fannie Mae (FNMA). During his tenure, the firm failed to account for $200 million in expenses allowing the executives to meet targets for maximum bonus payouts, the report noted. Johnson has also held the role of a non-employee director at United Healthcare and KB Home (KBH). CEOs of both firms illegally backdated stock options. Glass Lewis made a similar assessment in 2012. This year, "while the reputational risks to the Company decreased somewhat in 2012, we believe there has been no improvement in the Company's compensation practices," the report said. Instead, "the board has given itself a raise from already generous compensation levels." The average director who served on Goldman Sachs' board throughout 2012 received $500,000 in compensation compared to less than $300,000 at JPMorgan (JPM - Get Report), and $350,000 at Citigroup (C - Get Report) and Morgan Stanley (MS - Get Report). For 2012, the board increased the amount of the annual equity grant to directors from 2,500 RSUS