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."