One prominent investor who focuses on financial stocks said Goldman Sachs is facing 'the Lazard problem' - a culture where employees expect to get paid a lot, and will leave if they don’t. But, he says, management is not seeing things the same way as shareholders because they have fared much better financially, even in bad times.
Reuters blog Unstructured Finance says that Goldman has brought compensation costs down, in part, by firing, nudging into retirement, or happily accepting the resignation of people who make a whole lot of money. Overall, the bank reduced comp costs by $3.2bn last year and has cut 3,400 staffers from its payroll since the end of 2010.
But some shareholders think Goldman should be doing even more.
In the meantime, Reuters reports that Goldman's newly named CFO Harvey Schwartz would receive an annual salary of $1.85m and be eligible for variable compensation.
Current CFO David Viniar is among the best-paid executives on Wall Street. He received $15.8m last year.
'You have to go out and you have to take steps. You have to have different regulation, maybe more regulation in certain respects', he said, while addressing a room full of bankers and lawyers on Bay Street, the financial hub of Toronto.