Goldman Sachs is making some departing employees wait longer to collect deferred equity compensation they have accrued.
The change to Goldman's retirement rules could encourage employees with long tenure to leave before Jan. 1 in order to receive their restricted stock under the old, more liberal rules.
The Financial Times reports: "Goldman will scrap its policy of allowing employees whose combination of age and years of service exceeds 55 to collect all of their restricted stock upon departure. Instead, the programme - which is known around the firm as the 'rule of 55' - will be replaced with a 'rule of 60'." The bank says the change will align its restricted stock rules with those of rival institutions.
Most Goldman employees are allotted restricted stock every year as a portion of their annual bonus. As in other institutions, the restricted stock units vest over three years. They are forfeited if an employee leaves "under a cloud" or joins a competitor, but other departees receive the balance in their restricted stock accounts either immediately (if they qualify under the "rule of 55") or in fragments under the regular vesting schedule after they leave.
Goldman is currently in the process of shrinking its staff of 32,500 by 10 percent, as announced last month. There have been widespread reports (which the company denies) that the bank is cutting a larger percentage of its workforce.
The FT also reports that Citigroup last week eliminated extra severance it had been awarding employees who depart after 10 years or more of service. The change affects Citi workers who leave after Jan. 15, 2009.