By Daniel Wagner
AP Business Writer
WASHINGTON (AP) -- Goldman Sachs Group Inc. will tie the bonuses of top executives more closely to the company's financial performance.
The investment bank, based in New York, said in a recent regulatory filing that bonuses will be linked to financial benchmarks that might include return on equity, earnings, or the price of Goldman's stock or other securities issued by the company.
The plan applies to unspecified "key employees" starting this year. It gives Goldman the ability to take back bonuses from employees who violate company rules.
"The plan is a tool the compensation committee may use to further align incentive compensation with long-term performance," Goldman spokesman Michael DuVally said.
The financial overhaul law passed this summer allows regulators to block pay plans that encourage excessive risk. Such pay practices contributed to the financial crisis by pushing traders to make deals that yielded quick profits but later upended the market.
Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008. The bank was among those that created mortgage-backed investments that turned out to be toxic. Goldman later bet against some of those investments and made billions when the housing market collapsed.
Goldman took $10 billion from the taxpayer bailout that Congress authorized to unclog frozen credit markets. It then awarded 953 executives bonuses worth $1 million or more for their work in 2008.
Published: Tue, Dec 28, 2010
