How to be off by 100%, yet still closer than everyone else

Posted by Marc Hodak on November 17, 2008 under Executive compensation | Be the First to Comment

Remember the preemptive “greed baiting” over the last several weeks, those breathless reports about how much financial services executives were going to get in bonuses this miserable year? So called compensation experts have “gone through the numbers” supposedly showing that bonuses would be every bit as high as last year. These tinfoil speculations sent the likes of Andrew Cuomo and Henry Waxman into fits of outrage. My prediction to any reporter who asked (you’re welcome, Liz) was a bonus drop of 30-50% (among the survivors).

Well, in the case of Goldman Sachs, I was off by, oh, 100 percent. The firm is announcing today that their top seven executives will forgo ALL of their bonuses for 2008.

The top guys at Goldman are all mensch, and they have big kahunas risking the loss of talent to less politically savvy Wall Street sharks. But they know what’s good for the franchise, and are now putting tremendous pressure on their weaker peers (and they’re all weaker) by putting this out there right now.

Whaddya say, Mack? Are you willing to go another year without a bonus? Are you still tapping away to see how much Harry, Dick, and Jane should get (or Colm, Michael, Fabrizio…)? Save yourself the trouble. They aren’t going anywhere in 2009.

Collectively, Goldman’s munificent seven have sacrificed about $200 million on the altar of envy. I’m sure the politicians will take credit for the sacrifice, then take credit for the Spring rain that follows, when all they did was build the altar.

All I have to look forward to next Spring is a much simpler proxy statement.