Macquarie Group analyst David Trone does not approve of what Goldman Sachs is doing with compensation this year. Their decision to not take their $519 million cut from fourth-quarter revenues this year, money they would ordinarily apply to bonuses, and to make $500 million in charitable donations on top of that, reducing their compensation pool by a whopping 7 percent and leaving a paltry $16.2 billion in the kitty for their hardworking employees, just to appeal to some suits in Washington — well, it’s a shameful sign of capitulation, in Trone’s opinion.
Wrote Trone in a note to investors:
Goldman Sachs’s decision reflected “management buckling to media/Washington pressure on pay…paying out at a 36 percent rate is unlikely to be attempted two years in a row, lest the company see an outflow of talent and its franchise destroyed.”
Destroyed. Frankly, Trone is disgusted. This is Goldman Sachs! If they’re not making money hand over fist and spraying it out all over each other at the expense of the American people, well then what the hell do they even stand for? Goldman Sachs does not capitulate to plebes. That is not part of their brand. They did not take over the world by being nice. Trone has one question for CEO Lloyd Blankfein: What would Napoleon do in this situation? What about Stalin? Would he have been like, “Fine, I see that everyone else thinks this is a bad idea, I’ll lay off?” Does Lloyd want to play with the big boys? Well then, he’d better pull up his pants.
Wall Street Firms Cut Pay, ‘Buckling’ to Washington [Bloomberg]
