Goldman's Masters of the Universe have announced that they are rich enough for the year:
I'll have to eat my words of recent days, as I had gone on record stating that Congressional scrutiny would have no effect on bonuses for bailed-out bankers (scroll down for my most recent writings). Christmas came early for GS's shareholders. Since their net income is on track for a loss in Q4, maybe this bonus suspension will leave enough left over to forestall a dividend cut. The other six execs won't make nearly as much as the CEO's $70mm, so let's say they each would have received $50mm (a generous guess based on their 2007 bonuses) for their outstanding achievements in making Goldman less profitable. Here's my back-of-the envelope estimate:
Dividend as of 11/14/08 = $1.40/share
Shares outstanding as of 11/14/08 = 394.53mm
Total est. dividend payment for 2008 = $552.34mm
Top seven bonuses forgone (wild guess) = $70mm + 6x($50mm) = $370mm
Yeah, I'd say the common stock's dividend is safe through at least Q209. Now I'm wondering: Did Warren Buffett call Lloyd Blankfein and demand that he safeguard Uncle Warren's preferred dividend by giving up these bonuses?
Nota bene: Anthony J. Alfidi holds no position in GS at the time this commentary was published.
Chief Executive Officer Lloyd Blankfein, 54, and six deputies told the New York-based bank's compensation committee yesterday that they would forgo the year-end awards, according to Lucas van Praag, a company spokesman. Each of the executives receives a salary of $600,000; Blankfein's bonus last year was almost $70 million.
I'll have to eat my words of recent days, as I had gone on record stating that Congressional scrutiny would have no effect on bonuses for bailed-out bankers (scroll down for my most recent writings). Christmas came early for GS's shareholders. Since their net income is on track for a loss in Q4, maybe this bonus suspension will leave enough left over to forestall a dividend cut. The other six execs won't make nearly as much as the CEO's $70mm, so let's say they each would have received $50mm (a generous guess based on their 2007 bonuses) for their outstanding achievements in making Goldman less profitable. Here's my back-of-the envelope estimate:
Dividend as of 11/14/08 = $1.40/share
Shares outstanding as of 11/14/08 = 394.53mm
Total est. dividend payment for 2008 = $552.34mm
Top seven bonuses forgone (wild guess) = $70mm + 6x($50mm) = $370mm
Yeah, I'd say the common stock's dividend is safe through at least Q209. Now I'm wondering: Did Warren Buffett call Lloyd Blankfein and demand that he safeguard Uncle Warren's preferred dividend by giving up these bonuses?
Nota bene: Anthony J. Alfidi holds no position in GS at the time this commentary was published.
