In order to ward off complaints about the record bonuses they intend to pay out this year, top executives at Goldman Sachs have been holding meetings with major investors in which they explain their compensation structure and why it’s important for them to continue to rake in the Benjamins. As you might imagine, the dog-and-pony show does not involve Lloyd Blankfein and CFO David Viniar donning top hats and performing “Money” from Cabaret. In fact, according to The Wall Street Journal, it’s downright boring.
As part of at least some discussions with shareholders, Goldman has distributed a document titled “Goldman Sachs Compensation Practices,” which explains the firm’s pay principles and practices in the same dry, measured tone typically used in presentations about Goldman’s business operations. From 2000 to 2008, for example, the firm “generated the highest average [per-share earnings] growth rate,” return on equity and growth in book value per share, “and still been able to pay out more on average per employee” than the average for a group of publicly traded rivals, according to the document.
The document is fourteen pages. We assume it also comes with a slide rule, so that investors can follow along by doing the numbers themselves. This is pretty genius, we have to say. By the end of class, most investors are probably so addled they completely forget what they’re actually there for, which is to talk about how the firm is raining piles of filthy lucre on employees the year after its near-death. They’re probably just looking out the window, longing for recess.
