NEW YORK (Reuters) - Goldman Sachs Group Inc’s board lifted a key performance target that the bank must reach for Chairman and Chief Executive Lloyd Blankfein to redeem a new long-term incentive stock award, according to a proxy filing on Friday.
In addition to his $23 million compensation package for 2013, the board offered Blankfein the potential to receive restricted stock worth $6 million at the time of the award.
In order to get the full award, Goldman must generate an average return on equity of at least 12 percent over a span of either three or five years, at the board’s discretion. That goal is higher than the 10 percent minimum that had been set in the prior year. He must also increase book value per share by 7.0 percent, on average, over that time frame to get the full award.
If Blankfein can outperform the board’s expectations by hitting an average return-on-equity of at least 15 percent and increase book value per share by at least 12 percent, on average, his stock award will increase by 50 percent. Those targets remain the same as the prior year.
In awarding his compensation for 2013, the board said Blankfein “continued to demonstrate impressive leadership, drive and a keen focus on serving our clients and inspiring our people” and also “served effectively as the external face of the firm.” The board considered reviews of Blankfein submitted confidentially by his colleagues, as well as Goldman’s financial performance.
Last year, Goldman’s shares rose 39 percent, within the range of most other big U.S. banks stock movements, but it delivered a return-on-equity of 11 percent, higher than the 6.2 percent average of its U.S. peers, partly through an aggressive share repurchase program.
While Goldman’s pre-tax earnings grew only 5.0 percent, the board noted that earnings growth in dollar terms was 12 times as high as its revenue growth Goldman achieved that feat primarily by cutting compensation costs.
In a letter to shareholders, Blankfein said Goldman Sachs performed “relatively well, generating solid results for the year.” He said he is committed to improving returns in future years, even if business conditions do not improve.
In addition to his compensation and long-term incentive grant, Blankfein also received $33 million last year related to his investments in funds managed by Goldman Sachs.
Shareholders also covered $323,759 worth of perks for Blankfein, including health-care costs, life insurance, retirement fund contributions, private transportation for business trips and identity-theft protection.
Reporting by Lauren Tara LaCapra