Lunchtime Links: Goldman goes for unfettered bonus freedom

24 March 2009

2 minute read

Lunchtime Links: Goldman goes for unfettered bonus freedom

Rumour has it that Goldman Sachs now aspires to repay its $10bn of TARP money very, very soon, quite possibly as early as next month. Blankfein originally aspired to repay by the end of the year, so this undoubtedly has something to do with the punitive tax proposals going through Congress. There's speculation that the payment might be funded by the sale of Goldman's ever depreciating stake in ICBC, although the New York Times points out that Goldman is sitting on '$100bn of available cash, so a mere $10bn should be no problem.'

Needless to say (and as CNBC pointed out last week), if Goldman repays early it will be in a position to 'rule Wall Street' by poaching superior talent from other firms still subject to TARP pay restrictions. An interesting graph in yesterday's FT (which unfortunately hasn't been replicated on the web), showed Goldman is doing quite well already - it now ranks ninth by market value among global financial services firms, up from 20th in 1999.

Morgan Stanley says senior execs will forfeit stock if 3 year performance targets not met. (Financial News)

Europe banning big bonuses too. (Insurance Times)

Credit Suisse pays out €447m in toxic bonuses. (Financial News)

So you want 14x free leverage? (Zero Hedge)

Where Geithner's gone wrong. (Information Arbitrage)

Credit Suisse has had a strong start to 2009. (Reuters)

"If the global economy, financial markets, legal and regulatory environment, and competitive environment develop as foreseen, Deutsche Bank expects to return to profitability in 2009."

(Bloomberg)

Meredith Whitney is hiring. (BusinessInsider)

Small bond traders hiring on Wall Street. (Bloomberg)

Barclays doubling investment banking staff in Japan. (Bloomberg)

"Merrill Lynch left us on the streets..." (Bloomberg)

Could the bonus bill encourage sign-on bonuses? (Dealbreaker)

Italy's answer to the financial crisis. (Reuters)

AUTHOReFinancialCareers UK

Insider Comment

tc
tcarroll
25 March 2009
Obama is making noises about the US legislation that would suggest that he would veto the punitive tax currently being considered in congress. My expectation is that the legislation won't go through, Obama will veto it, or else the banks will find another way to pay it out in order to not lose their key talent. And this doesn't even address the GS side of the equation; while GS would be in the position to acquire the people, their protective nature concerning their culture may keep them from allowing a sudden surge of senior lateral hires to potentially impact what they see as one of their competitive advantages.
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Wa
Walec
25 March 2009
This has gone way beyond TARP payments, or whether bonuses were contractual, or if some wretched banker is induced to jump ship to a non-TARP firm. The public in Europe and America have the bankers in their sights. Unlike other recessions - say 1981 or 1992 - they're seen widely as the villains. No one cares about the tricks they're playing to keep their noses in the trough. Each time a banker's discovered coining money, while thousands of ordinary people lose their jobs, pensions, savings, and homes, they'll be a roar of rage. The subject's sunk into popular conciousness - see http://www.total-banker.com.... It's now just a question of seeing how arrogant the bankers will be, and how loud the roar of rage. They're drinking in the Last Chance Saloon.
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BO
BODude
24 March 2009
RM,
FYI, goldman, along with several others, were 'forced' to received TARP, as part of the bail-out plan.
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Da
Davros
24 March 2009
Couldn't they just give the government back the money they got from AIG?
Stay classy Broadstreet
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RM
RM, London
24 March 2009
If Goldman has $100bn cash reserves, how did they qualify for a $10bn handout? Is it just there for the asking?
Can I get some?
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