Goldman pays boss $54m
WSJ.com - December 20, 2006
Goldman’s Blankfein Gets Street’s Biggest Paycheck By RANDALL SMITH
Goldman Sachs Group Inc. paid its chairman and chief executive, Lloyd
Blankfein, about $54 million for 2006, a record for Wall Street
bosses who are harvesting their share of bull-market bounty.
Mr. Blankfein, who became CEO midway through the year when Henry
Paulson became Treasury secretary, saw his pay soar 42% from $38
million for 2005, when he was president and chief operating officer.
John Mack of Morgan Stanley, the only other big-firm Wall Street CEO
to report his pay, last week disclosed receiving about $41 million
for 2006, his first full year at the helm. He received $13 million
for five months’ work in 2005, on top of a $26 million signing bonus
for rejoining in June 2005.
Mr. Blankfein’s pay package reflects the firm’s performance atop the
Wall Street heap over the past year, when its profits rose 70% to
$9.54 billion and its stock price surged 59%, increasing its stock-
market value by $31 billion.
But it also reflects the inflation in Wall Street CEO pay packages,
which last year generally came in at between $30 million and $40
million, with the stock market in the fourth year of a bull run and a
boom in private-equity buyouts and hedge-fund trading.
A former tax lawyer and gold salesman who rose to become head of the
firm’s fixed-income, currency and commodities division in 1998, the
52-year-old Mr. Blankfein epitomizes Goldman’s risk-taking culture.
His latest pay package includes a cash bonus of $27.3 million,
restricted shares valued at $15.7 million and options valued at $10.5
million, according to a filing yesterday by Goldman, which disclosed
the stock awards and included the cash bonus. He also earned a salary
of $600,000.
Mr. Blankfein becomes entitled to 40% of the 77,776 shares of
restricted stock immediately and the remaining 60% in November 2009.
Goldman’s next two top executives, co-presidents and co-chief
operating officers Gary Cohn and Jon Winkelried, received identical
packages of $15.4 million in restricted stock and options worth $10.3
million. While Goldman didn’t disclose the size of their cash
bonuses, neither executive’s compensation will top Mr. Blankfein’s,
according to someone familiar with the firm.