Pressure Builds for Goldman CEO to Skip Bonus
With Goldman Sachsexpected to report its first quarterly loss since it became public in 1999, pressure is building for Chief Executive Lloyd Blankfein to forgo his bonus for this year.
Blankfein made $68 million last year.
There are several reasons why it is likely that Blankfein will not take the bonus, according to people close to the firm.
One is the expected weak fourth-quarter results, which are set to be released in December.
Another reason is that people close to Goldman Co-Presidents Gary Cohn and John Winkelried said they expect them to skip this year's bonus. Each made $56 million last year.
(See video of Charlie Gasparino's report on Goldman bonuses, left)
Overall, top executives at Goldman could see their bonuses decline between 50 percent and 70 percent this year, putting them among the hardest hit as Wall Street bonuses decline.There are several factors contributing to the shrinking bonuses at Goldman. Chief among them are: ongoing government scrutiny and less leverage.
Goldman made bundles of money in proprietary trading and prime brokerage, but now it's a bank holding company, and the firm will have to cut back on those two capital-intensive activities.
Sources close to Goldman said the firm is now busy cutting 10 percent to 15 percent of its overall staff. The job cuts are expected to be bigger in certain areas such as proprietary trading and prime brokerage, where the cuts could be as much as 20 percent to 30 percent.