I like this move. Goldman’s reasoning for giving up the bonuses for top executives:
“While the firm has distinguished itself through many aspects of the crisis, we cannot ignore the fact that we are part of an industry that is directly associated with the ongoing economic distress,” the firm spokesman said late Sunday.
Source: Goldman Chiefs Give Up Bonuses ($), WSJ
If Goldman does this despite having a decent year compared to their peers, imagine the pressure it will put on other investment banks to do the same!
As was proved last week in the bonus discussion here on AFM (this post and this post), it’s a touchy subject. I’m a staunch believer that that bonuses should only be paid on company-wide results. If the company has a bad year, then no bonuses should be paid. If the company has a good year, then bonuses should be paid based on performance. In other words, split the pie when there’s a pie to split.
Anyway, I applaud Goldman’s move. I think it’s the right thing to do and I think it sends the right message. Besides, Goldman’s CEO, Lloyd Blankfein, should still have some of that $68.5 million left over from last year!