No, that’s not a pun on the change/no change to compensation policies at our favorite investment bank. It’s a headline about its decision to bar a shareholder proposal from the Nathan Cummings Foundation, reported earlier today by Reuters. The Foundation wanted Goldman's compensation committee to produce a report by October that includes an analysis comparing the pay of top executives to median wages at the company and an evaluation of whether the pay is excessive and should be modified. Goldman has asked the SEC to allow it to omit the proposal from its proxy because of “technicalities” according to the Foundation.
Firstly, shareholders get another chance to vote on pay at the company as Goldman has adopted Say on Pay even though it is no longer subject to TARP regulations and doesn’t have to. So shareholders do get to have their say.
But we need to think a little about shareholders here.
Goldman has either awarded or reserved for award more than half its outstanding shares for its stock incentive plan alone. Then there’s all that employee stock ownership (the directors and officers own nearly 4 percent on their own!) How many shares do public shareholders actually own? And therefore how many are likely to vote for any kind of “shareholder” proposal.
In other words, what are they worried about? Or is there something we don’t know….
Paul Hodgson - Senior Research Associate
