Big shareholders at Goldman Sachs
Although investors are not pushing for a huge cut, they feel Goldman, which received $10 billion of taxpayer help during the credit crisis, should better reward them for this year's rebound, the paper said, quoting people familiar with the situation.
Goldman Sachs spokesman Lucas van Praag said the criticism of bonuses missed the point.
Our investors have consistently told us that they expect the firm to set compensation at a level which produces attractive returns to shareholders while maintaining the strength of our franchise, which is the basis for generating returns for the long term, van Praag said. They know that compensation at Goldman Sachs is directly linked to the firm's performance and that our compensation ratio has consistently been at or among the lowest in the industry.
A year after the implosion of U.S. bank giant Lehman Brothers
Reacting to public outrage to bankers' greed and fat-cat pay checks in the run-up to the crisis, the Group of 20 nations agreed on guidelines for bankers' pay that would put the focus more on long-term performance rather than short-term gains.
Goldman's robust performance this year is pushing investors to ask for higher returns. Goldman generated net income in excess of $3 billion in the third quarter.
The shareholders are also concerned about a change in the company's financial statements that increased the company's total headcount by adding temporary employees and consultants, the Wall Street Journal said.
Due to the change, it looked like Goldman employees are on pace to earn $717,000 per person in 2009, the Journal said, instead of the $775,000 that they would earn on average if temporary employees and consultants were not counted.
The United States in June appointed pay czar Kenneth Feinberg to review pay at some of America's biggest companies.
Regulators in European countries such as Britain, France and Switzerland are already taking steps to introduce new rules on bankers' compensation. Some banks, like Swiss lender Credit Suisse
But Swiss-based investment fund Ethos, which has a keen interest in corporate governance practice, says the key to changing compensation plans is empowering shareholders.
Ethos and eight Swiss pension funds are planning to repeat this year initiatives they undertook in the aftermath of the crisis to force large companies to accept a say on pay by shareholders.
(Writing by Lisa Jucca and Supantha Mukherjee, additional reporting by Eva Kuehnen in Frankfurt and Steve Eder in New York; Editing by David Cowell and Steve Orlofsky)