Goldman Sachs Sued by Shareholders for Breaking Own Rules on Executive Pay
Source: All Gov.
Ken Brown, a shareholder of Goldman Sachs, claims the firm is supposed to spend about 50% of its net revenue on salaries and bonuses. But in 2008 Goldman dished out $4.82 billion in bonuses despite earnings of only $2.32 billion..In the first quarter of 2009, it spent 259% of its net income on employee and executive compensation and in the second quarter 193%. Brown is now suing Goldman for exceeding its own rules on salaries and bonuses.
The lawsuit does not cover Goldman’s bonuses for all of 2009, which have yet to be publicly revealed. Bloomberg reported last year that the firm’s compensation during the first nine months were $16.7 billion, but other estimates put the figure at more like $22 billion for the entire year, which would be a record for the company.
The Central Laborers’ Pension Fund of Illinois has filed a similar suit against Goldman Sachs.
-Noel Brinkerhoff
Goldman Sachs Directors Bled the Bank Dry, Shareholder Says (by Barbara Leonard, Courthouse News Service)
Lawsuit: Goldman Sachs Bonuses Bigger Than Its Earnings (by Daniel Tencer, Raw Story)
Lawsuit Against Goldman Sachs (New York Supreme Court) (pdf)
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