The Opinion Page
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On December 15, 2010, www.bloomberg.com reported the following:
"Goldman Sachs Group Inc.’s top executives will get about $111.3 million in stock next month in a delayed payout from last year and their record-setting 2007 awards, even as Wall Street prepares for lower bonuses.
Chief Executive Officer Lloyd C. Blankfein, 56, is poised to receive about $24.3 million in January, based on the closing share price on Dec. 14, while President Gary D. Cohn, 50, will get about $24 million, company filings show. The payouts, just a portion of the $67.9 million bonus awarded to Blankfein for 2007 and the $66.9 million paid to Cohn, reflect a 24 percent decline in the stock’s value since it was granted at $218.86.
Within a year after the bonuses were approved, Goldman Sachs took $10 billion of U.S. bailout funds, converted to a bank and was borrowing as much as $35.4 billion a day from Federal Reserve emergency programs. This year the New York-based firm paid $550 million to settle U.S. regulators’ fraud charges related to a mortgage security the company sold in 2007.
“Clearly we now look back and say, ‘Were things fine? Should they have paid? Maybe not,’” said Jeanne Branthover, a managing director at recruitment firm Boyden Global Executive Search in New York. “There’s nothing you can do about it. The payouts were in stone. But hopefully, in the future, they won’t be.”
In the weeks following the report in Bloomberg, it has become clear that Golman Sachs, and other large investment banks are charging full steam ahead, awarding billions in bonuses to their executives and staff. One report put the amount at an average payout of roughly $500,000 per employee. It is clear that the receptioist isn't going to enjoy a $500,000 bonus check. Executives will get the lion's share.
So, as the US government (translateion: "taxpayer") bails out the braintrust at Goldman Sachs et. al, the extremely rich get even richer.
During Mr. Obama's State of the Union speech tonight, perhaps he ought to bring out his Louisville Slugger, and drag some of these banking mandarins out to the woodshed, giving them the arse-whuppin' of their lives. Simply put, the investment bank eecutives have been big catalysts in one of the greatest financial crises in a century, even while they feather their beds of largesse with taxpayer money. ,
One has to question the judgement (or motive) of the Obama Administration as well, however. After all, as Bill Waddell of Evolving Excellence pointed out on January 25, 2011, Mr. Obama has just appointed GE's Jeff Immelt to head up the government's commission to create jobs. Immell appears tp have achieved good results during his tenure at GE from 2000 to 2010. The problem is, however, that 96% of the 81,000 new jobs created within GE between 2000 and 2010 were in countries OTHER THAN the USA!
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John Skelton is the Principal Consultant and founder of Strategic Inventory Management.