UPDATE 1-Goldman Sachs could slash CEO bonus amid pressure

* Comp experts think Blankfein will get less than in 2007

* Goldman disputes reports about Blankfein’s $100 mln bonus

* Leaders of trading divisions could see big paydays

(Adds bonuses announcement could come any time)

By Steve Eder

NEW YORK, Feb 1 (BestGrowthStock) – Goldman Sachs Group Inc (GS.N: ) is
likely to slash its chief executive’s bonus from the record $67.9
million he got two years ago, but Lloyd Blankfein’s pay package
could still fuel criticism the bank has been “tone deaf” in its
approach to the financial crisis.

Efforts to deflect criticism and keep regulators at bay has
already prompted Goldman to change its bonus strategy, curbing
compensation in the fourth quarter of 2009 and eliminating cash
bonuses for top managers, instead paying them in stock.

But Goldman still may face a storm of criticism when it
announces the bonuses of its top executives even as it seeks to
trim the headline numbers after a year of record profits. The
announcement could come at any time.

“They have made a number of moves to try to ameliorate the
issues,” said Alan Johnson, a Wall Street compensation consultant.
“I would be shocked if it didn’t have an impact on his and
everybody else’s total.”

Johnson estimated that Blankfein will get a bonus of more than
$40 million for 2009, a year in which Goldman reported record
earnings of $13.39 billion.

That would fall well below the $67.9 million he received in
2007. Blankfein took no bonus in 2008 during the worst of the
financial crisis.

The Times of London reported on Monday that Blankfein could
receive a bonus of up to $100 million, thumbing his nose at
President Barack Obama and his recent crackdown on the banking
industry. The newspaper cited bankers who were in Davos,
Switzerland, for the World Economic Forum as its sources.

Goldman spokesman Lucas van Praag denied the report, calling
it “speculative nonsense,” although he acknowledged that Goldman’s
board had yet to make a final decision on executive compensation.

A separate report in the Wall Street Journal said at least one
unnamed London banker in Davos was willing to wager millions of
pounds that Blankfein, a staunch defender of Wall Street, would be
out of a job within two years — an anecdote that van Praag called


The reports on Blankfein and Goldman’s quick retorts
underscore the sensitivities at play.

“Underneath that cool exterior, it is apparent that there is
some very great sensitivity at Goldman about executive
compensation these days,” said Scott Tangney, a consultant with
public relations firm Makovsky + Co, who added that he expects
Goldman to pay Blankfein at a lower level than 2007 and other

“Because of the government pressure and the public scrutiny,
it has already forced Goldman to handle executive compensation in
a very different way.”

Goldman last month sidestepped controversy over its ballooning
bonus pool by cutting off compensation after three quarters and
giving $500 million to charity. Before the shift, Goldman was on
pace to surpass its record payout of $20 billion in 2007. But the
actual figure was $16.2 billion.

While political pressure could affect high-profile executives
like Blankfein, it leaves open the possibilities for outsized
paydays for lesser-known executives and star traders who helped
the firm set a record profit in 2009.

In 2008, when most of Wall Street was at death’s door, 953
Goldman employees made at least $1 million apiece, according to a
report by New York Attorney General Andrew Cuomo. There were 21
Goldman employees who made at least $8 million each.

For 2009, executives like David Heller, Harvey Schwartz,
Edward Eisler, and Pablo Salame, all of whom lead units that
oversee bond, stock, currency and commodity sales and trading,
could see mega payouts after the firm reported $23.3 billion in
revenues from fixed income, currency and commodities trading in
2009, up from $3.7 billion in 2008.

Paydays for them of more than $20 million each would not be
surprising, headhunters and recruiters said.

Richard Lipstein, a recruiter at Boyden Global Executive
Search, said he would expect “a huge payout for their stars.”

Goldman’s bonuses are expected to come largely in stock rather
than cash, following a trend on Wall Street to change pay designs
and curb risk-taking.

Still, those changes are likely to fall on deaf ears to an
angry public focused on the big numbers, said Sarah Anderson, a
fellow with the Institute for Policy Studies, which is critical of
Wall Street, and co-author of the recent study “America’s Bailout

“They are claiming to have made changes, but for the ordinary
taxpayers who have contributed very much to the recovery of the
markets, they aren’t seeing it as substantial change,” Anderson
said. “They are seeing it as business as usual.”

Stock Today

(Reporting by Steve Eder; Editing by Phil Berlowitz)

UPDATE 1-Goldman Sachs could slash CEO bonus amid pressure