Goldman Execs May Be Forced to Give More to Charity

Amid a growing public outcry over big bonuses at Goldman and other Wall Street banks, Goldman in October said the firm itself would donate $200 million to its charitable foundation, nearly doubling its size. (The foundation is separate from GS Gives.)

It also created a $500 million fund to lend to small businesses, a sector that has suffered in the tight credit environment. The plan will be overseen in part by Warren E. Buffett, who is a large Goldman investor.

Moreover, the firm — which initially was on track to pay closer to $650,000 to $700,000 on average to its workers — has scaled back planned bonuses by cutting the amount of revenue set aside for compensation, apparently in response to negative public reaction.

People familiar with the matter said that Goldman was planning to further reduce the portion of revenue dedicated to compensation in the fourth quarter.

Still, these moves have done little to quell criticism of banker bonuses, and it is unclear if Goldman’s latest idea, if adopted, would alter the public mood and the feeling in Washington that big pay packages are inappropriate given the troubled economy.

On Sunday, Christina D. Romer, head of the president’s top economic council, said on CNN’s “State of the Union” that it was “ridiculous” that banks planned to pay out billions in bonuses for last year. The payout, she said, “is going to offend the American people. It offends me.”

For their work in 2008, 953 Goldman employees were paid more than $1 million each; the bank accepted $10 billion in federal bailout cash, though it has since repaid the money, as have most other banks, freeing them of government limits on compensation.

Goldman, like its peers, is caught between conflicting constituencies. The bank cut worker pay somewhat last year, and some employees may leave for hedge funds or private equity firms if they are not paid handsomely for their contributions to the firm’s profits.

Some shareholders, however, want the bank to divert more of its money to them as dividends, though others think it should pay to keep workers happy. In the meantime, the public has little sympathy for bankers expecting compensation to return to previous levels.

The most important public relations tactic Goldman and other banks may use, headhunters said, is to instruct their employees to keep their heads down.

“They’ll try to make sure their people aren’t going out and celebrating their financial wins,” said Maurice Toueg, a recruiter with Capstone Partnership.

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