Goldman Sachs Top Execs Got Huge Stock Windfall During Crisis

UPDATE: Despite concerns raised yesterday, bank analyst David Trone does not think Goldman Sachs will lose the opportunity to take Facebook public. From a report at CNBC:

Was the midcourse change a blow to Goldman's reputation, I asked [Trone], or just a minor setback in yet another of the firm's strategic coups?

The latter, he said, pointing out that the firm still appears to have landed one of the most envied potential clients of recent years--a pre-IPO tech company with an implied $50 billion valuation.

Goldman Sachs' wealthiest clients may be angry that an exclusive offer to invest in Facebook was pulled from under their feet, but the bank's executives are posed to reap a windfall from stock options granted during the financial crisis.

A new study of Goldman's regulatory filings and internal documents conducted by the New York Times and Footnoted.com, reveals some startling details about the composition and compensation of Goldman's top employees.

The study documents the members of a group of partners made up of Goldman's star performers. There are 475 current members and the average length of membership in this elite club is 7 years.

In 2008, during the height of uncertainty in the financial world, Goldman issued nearly 36 million stock options (a tenfold increase from the prior year) -- primarily to partners. Now, business is booming again, and the bank's stock price has more than doubled. The Times lays out the numbers:

The documents illustrate just how much wealth the partnership owns and has cashed out over the years. Goldman has almost 860 current and former partners, the documents show. In the last 12 years, they have cashed out more than $20 billion in Goldman shares and currently hold more than $10 billion in Goldman stock.

Of those 860, only six percent are female.

Current and former members include CEO Lloyd Blankfein; chief operating officer Gary D. Cohn; former Treasury Secretaries Henry M. Paulson Jr. and Robert E. Rubin; the former governor of New Jersey Jon Corzine; and William C. Dudley, the president of the Federal Reserve Bank of New York.

Meanwhile, Goldman's elite U.S. clients are growing anxious after they were told they couldn't invest in Facebook just two weeks after Goldman persuaded them to. Wary of regulatory scrutiny and "intense media attention," the bank announced Monday that it would not sell Facebook stock to its U.S. clients. The deal has been called a "serious embarrassment" for the bank.

The Wall Street Journal talks to some of those slighted.

"Before this deal, if they told me to buy something, I'd buy it," he said. "Now I'm paying attention to the fees. And I'm going to tell all my friends who are Goldman clients to look at their fees. I can't see how that's good for them in the long term."

Comments

[Bill Roth]

03:48 PM on 01/31/2011

Wow! I wonder if they(Goldman Sachs) could afford to help with the relief fund of the american tax payer? Oh, wait that might just be a conflict of interest. "interest"? Did you say interest? said Lloyd Bankfein.

[Rearden 1957]

12:40 AM on 01/21/2011

How is this bad? Everyone has spent the last 2 years whining about the poor relationship between performance and pay for the finance industry. Turns out GS directly linked the financial fortunes of its executives to the long term performance of the firm. That's what we all should want. This would only be a story if they say, backdated the options (Steve Jobs) which is about as unethical as possible without actually pick the pocket of shareholders.

[helioszephyr]

04:06 AM on 01/20/2011

Here we go again... socializing their losses, privatizing their gains.
Via lobbying payoffs in DC.

[ejreed]

09:26 PM on 01/19/2011

The New York Times on the Wall Street Giant too big to fail.
The Golden Ticket at Goldman Sachs
Goldman Sach's partners are its highest executives and its biggest stars. An examination of filings by The New York Times reveals the power and wealth of this secretive group. http://www.newslook.com/videos/284625-the-golden-ticket-at-goldman-sachs?autoplay=true

[costellowriter]

08:48 PM on 01/19/2011

Anyone who buys their shares at ridiculously inflated prices deserves to lose their money. But sadly, it will be the government that buys them with tax payer funds. Which is not their money.
http://socyberty.com/economics/murder-of-the-middle-class/

[almost homeless]

03:27 PM on 01/19/2011

On average the 860 goldman elite have cash out $200,000,000.00 and have $100,000,000.00 in GS stock. I'm happy to know that the GS elite that where wearing their FED hats at the time could see to it that the rest of us would scrape up enough cash to pay off GS AIG bets against the mortgages they sold to retirement funds of our grandparents at 100% of face value while the ecomony sunk to 20% of face value. And allow them to borrow money at .25% and then lend it back to us at 3-5% so we could have the money to pay them for their bets against the products they sold or else the elite GS (including the FED guys giving GS that money) would have had to put some pocket change back into the giant vampire squid they helped build to suck the planet and people dry for their personal obscene gains.

Yep, we are all slaves to the GS elite. At least we're part of GS!

[Fiscalprudence]

07:25 PM on 01/19/2011

Almost....check your math. The average is nowhere near 200mm

[SuperKK]

08:47 PM on 01/20/2011

More like $20M and $10M. Still, nothing to sneeze at.

[not going2take it]

03:13 PM on 01/19/2011

As a reward for their honesty and integrity
they .r.a.p.e. rewards of their hard work...

[structurequity]

02:40 PM on 01/19/2011

Indictment of the haves and ever increasing having at the expense of all have nots, makes me ill, truly ill at the power of their abilities to do us in and do it with economic reason as their ethic.

[lovinlife2]

02:29 PM on 01/19/2011

Joe Average continues to carry the weight for Wall Street, along with whatever shenanigans orchestrated by the monied and politically powerful.

[Scent]

01:43 PM on 01/19/2011

So Goldman Sachs bought off Obama and made him install a few criminals in key positions.

Then they profitted from the catasrtophe.

And WE pay for all of it.

It is really high time that we stop paying and start paying them BACK.

[meijiame]

01:03 PM on 01/19/2011

So Goldman feels the shady facebook deal was a "serious embarrassment"?

I wonder if they know that's kind of how most of the rest of the country feels about them. That their continued existence is a "serious embarrassment."

[Walter Westcot]

12:48 PM on 01/19/2011

And another innocuous update on the rape and pillage of America - that will push the next Jared Loughner over the edge.

Read the remarks.... sounds like empowerment to me.

IF you are a marginal player with nothing left to lose.... and there are bunches of em out there.

[arkymorgan]

12:36 PM on 01/19/2011

I don't know how I am supposed to feel about this.

Not surprised or shocked, of course. Not even furious, anymore.

Maybe just a little more nauseous than usual.

[Scar1]

12:13 PM on 01/19/2011

Oh that too-like we lost home; car; stocks and so-we hate you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111

[maidenofdforest]

11:33 AM on 01/19/2011

These executives are playing ball with our money but charity begins at their homes....?