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Goldman Sachs sued by big pension fund over pay
NEW YORK |
NEW YORK (Reuters) - Goldman Sachs Group Inc (GS.N) was sued on Monday by a large union pension fund that accused the Wall Street investment bank of overpaying its executives.
The International Brotherhood of Electric Workers fund filed the lawsuit in Delaware Chancery Court, seeking to recover money for the company on behalf of other shareholders.
It seeks to stop Goldman from allocating roughly 47 percent of 2009 net revenue as compensation, saying such allocations "vastly overcompensate management and constitute corporate waste."
The lawsuit also wants Chief Executive Lloyd Blankfein and others in management, rather than shareholders, to be responsible for charitable contributions that Goldman is making as a an apology for its activities.
Goldman has been at the center of a public debate over how much banks should pay out in the wake of the 2008 financial crisis, after taking billions of dollars of federal bailout money.
Last week, Goldman said it would cap 2009 compensation expense at $16.2 billion, for a 36 percent compensation ratio, despite posting a record profit.
The bank also said its board rejected several shareholder demands to investigate recent pay awards and recoup excessive pay, while admitting it could face "negative publicity" from media portrayals.
Goldman spokesman Ed Canaday said: "We believe the lawsuit is completely without merit." A lawyer for the plaintiff did not immediately return a call seeking comment.
The lawsuit is similar to one filed in the same court in January by the Southeastern Pennsylvania Transportation Authority, or SEPTA, which oversees public transit in the Philadelphia area.
The case is International Brotherhood of Electrical Workers Local 98 Pension Fund v. Blankfein et al, Delaware Chancery Court, No. 5315,
(Reporting by Jonathan Stempel and Steve Eder; Editing by Steve Orlofsky.)
Long over due …. They are over paid crooks who have taken unwarranted risk and need to be fired not rewarded…. The system has been rigged in favor of these obscene contracts that are without merit….
How many lives have these people ruined?
Put them jail for theft, and make them work on a chain gang.
These guys and their CEO crony network line each other’s pockets through M&A that leads to worker layoffs. Have you seen how many merger deals are getting announced each week?
The tables are turning as workers find they do NOT have to be victims to the economic hubris of the greedy elite … end game: pay it back and stop the historically based theft of the populace.
I am a shareholder. I will join this suit with interest and enthusiasm.
sign me up. It’s about time institutional investors took on this fake meritocracy that is goldman sachs. this firm should be broken up, its leadership indictged for fraud perpetrated against the investors that are unlucky enough to be partnered with these thieves. Godd on you IBEW. Now where are the rest of you pension fund leaders when we need you. Us small shareholders are powerless to do anything, but you institutional investors have some clout. Take IBEW’s lead, i implore you!!!
I read this article with interest. Goldman Sachs is getting what they deserve. I read yesterday that the EU has not allowed Goldman or J.P. Morgan to participate in their latest bond offerings because of what they did to Greece. These banks will lose millions in fees. It is about time.
EU disallowing GS to participate in bond offering? But the EU has allowed Societe General to participate. It is a part of the GS Group Inc, so this is not what it appears to be. As a reminder, SG received $12B from TARP and quietly sent $11B back to their big brother Goldman Sachs. It is unfortunate, but the beat goes on and the public is being hood winked again.
Matt Taibbi said it best … “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”
If you haven’t read his “Inside The Great American Bubble Machine”, you should.
