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Goldman’s Curbs On Bonuses Aim To Quell Uproar

Publication Date: 
December 11, 2009
Source: 
The New York Times
Author: 
Louise Story

Professor Joseph Grundfest, an expert in securities law, is quoted in this New York Times article on regulating executive compensation:

With France joining Britain in proposing a steep tax on bank bonuses, Goldman Sachs moved on Thursday to quell the uproar over its resurgent profits and pay.

Bowing to calls for restraint in tough economic times, Goldman said that its most senior executives would forgo cash bonuses this year. Instead, the 30 executives will be paid in the form of long-term stock — an arrangement that means they will not get big year-end paydays, but one that could turn out to be enormously lucrative if Goldman’s share price rises over time.

...

Mr. Feinberg’s domain, meantime, is shrinking rapidly. Bank of America paid back its bailout money on Wednesday and only its top 25 workers whose pay Mr. Feinberg ruled on in October will be subject to his mandates this year. In recent days, Citigroup, too, has been trying to cut its lifeline to Washington in part to protect its workers from Mr. Feinberg’s rulings on Friday.

“Ken Feinberg has had more of an impact of driving people out of the bailout than on compensation,” said Joseph A. Grundfest, a professor at Stanford Law School. “His job in large part is like trying to nail Jell-O to the wall.”