Glass Lewis Recommends Voting Against Goldman Sachs Sale

NEW YORK ( TheStreet) - Proxy advisory firm Glass Lewis is recommending Goldman Sachs ( GS) shareholders vote against an investor proposal for the company to consider selling itself.

According to Goldman's annual proxy statement released in April, a shareholder proposed the investment bank hire advisors to explore strategic moves such as a full sale of the 144-year old investment bank.

Glass Lewis, a prominent advisor on annual shareholder votes, sided with Goldman and recommended shareholders not support the motion on Monday.

"We believe that a board and management team that has been mandated to undertake a merger or the sale of a company will not be in a good negotiating position," Glass Lewis wrote in the report.

The shareholder proposal, filed by Eric M. Fogel of Illinois, stated that Goldman should hire advisors given the firm's lagging stock performance since 2007, when shares were roughly a third higher than current levels just below $150 a share.

Fogel recommended the bank "immediately engage the services of an investment banking firm to evaluate alternatives that could enhance shareholder value including, but not limited to, a merger or outright sale of the Company," according to the proxy filing.

"The Company has not been successful in delivering a positive return for its shareholders."

In its proxy, Goldman Sachs said Fogel holds at least $2,000 worth of the bank's shares, however, the bank's Board of Directors rejected the proposal outright and urged shareholders to vote against it.

"We have determined that the best course of action at this time is to continue to focus management's time and energy on operating our business, addressing the risks and challenges presented to our firm, improving our business opportunities and remaining nimble in the face of an ever-changing economic environment," Goldman said in its April proxy statement.

While Goldman appeared to concede poor share performance since 2007, it cited previously challenging economic conditions and the strength the bank's current business model and management as reason shareholders should expect strong performance.

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