Obscenity Is Demonstrated By The Greed Of America's Wealthiest

Goldman Chairman Gets a Bonus of $53.4 Million

I really do not know what is more obscene: the facts that a single individual received a "bonus" of $53.4 million, which in and of itself denies the value of those that actually did the day-to-day work that generated the $9.5 billion in profits for Goldman-Sachs, or the fact that Goldman-Sachs made that many billions and has done NOTHING significant in the way of supporting charitable efforts in the US or anywhere else in the world. If Goldman-Sachs took even five percent of its profits aside for education, health care, or any other badly needed charitable effort, $475 million dollars would have done some good to offset the greed that is this uncharitable company. Even if Goldman-Sachs spends some money in charitable ways, it is not doing enough to reflect its status as a guest in our society, which is the manner in which our founders and framers intended business--especially the most successful big businesses--in our nation. Even is it spent 10 percent of that bonus on some charitable cause--let us say for housing for homeless families in New York City--that would mean that $5.34 million would be spent on affordable housing in one of our most needed metropolitan areas.

The thing to remember that all of these obscene payouts are on top of already obscene salaries. Each of those receiving huge bonuses for Goldman-Sachs is already receiving a salary that is 5-10 times that made by the average American worker, and 15-30 times what most people living in poverty make. When you consider than Blankfein only took over as chief honcho at Goldman in June of this year, the payout seems all the more obscene.

While I am fully supportive of individuals making a success out of their careers, and I support businesses being successful for the benefit of the economics of our society, I also support the religious, spiritual and humanist ideals that what we do is directly tied into how we treat others, especially those that need our help the most.

Most Protestant (especially evangelical) Churches require a tithe of 10% of all income (not profit, but income) be given to God to support the church. Most synagogues require the affluent to do charitable works for those in need. In fact, Hebrew and Yiddish have special words for those that do good deeds and the deeds themselves. The Qu'ran offers alms to the poor as one of the "Pillars of Islam." All three of these Abrahamic traditions call for charity as an act of faith and a duty to God. Buddhism, Hinduism, Jainism, Druze, Wicca, Druidism --in fact most every religious tradition in the world--calls for acts of charity and faith. Even among the non-religious--those that are atheist, agnostic, secular humanistic, or unaffiliated--charity is an act of human decency. Not taking aside a large portion of such wealth as what Goldman-Sachs has made and dedicating it to good works demonstrates an obscenity against all of humanity. In my view, it is just as perverse as those that take their wealth and dedicate it to doing harm to others, like those involved in Al-Qaeda, or other terror groups.

Goldman Sachs paid Lloyd C. Blankfein, its chairman and chief executive, a bonus of $53.4 million in 2006, the highest ever for a Wall Street chief executive.

Added to his $600,000 salary, the bonus means that Mr. Blankfein will make $54 million this year, up from $38 million last year. The bank’s compensation committee awarded him $27.3 million in cash, $15.7 million in restricted stock and options to buy Goldman stock valued at $10.5 million.

The payout comes a week after Goldman reported a record profit of $9.5 billion, or $19.69 per diluted share, in 2006. Its stock price is up almost 60 percent for the year, and the firm’s market capitalization is nearly $90 billion, more than triple its value when it went public in May 1999.

Mr. Blankfein took over as chairman and chief executive in June, when President Bush named the former chief, Henry M. Paulson Jr., to be Treasury secretary.

Goldman’s co-presidents, Gary D. Cohn, 46, and Jon Winkelried, 47, each received $25.7 million in restricted stock and options. John L. Weinberg, co-head of investment banking, was awarded $15.2 million in restricted stock and options.

The Bonus Army

Always one to look at the other side of an issue, the following is offered as a defense of these bonuses.

EVEN those accustomed to Wall Street’s otherworldly pay scales gasped last week when Goldman Sachs’s 2006 compensation numbers were released: $16.5 billion, up 40 percent in a year, some $623,000 per employee. The news triggered shock and envy: Oh, my God. That’s obscene! Boy, do I wish I worked for Goldman Sachs.

Pundits asked how such numbers could be justified, whether Goldman’s employees were that much more talented than the rest of Wall Street, whether Goldman’s shareholders were getting mugged. About the only people who had nothing to say were Goldman’s understandably discreet employees. What were they thinking?

Having once been on the receiving end of the Wall Street bonus system, I can guess: Some Goldman employees probably felt ecstatic; some fairly paid; and some shafted. (It is ever thus.) For example, word has it that some secretaries fumed about making a total of only $120,000 while their bosses made millions — until gently reminded that $120,000 is great secretary pay. Most Goldman employees probably have a sense of how lucky they are compared to those outside 85 Broad Street. Few probably suffer from the delusion that the bonuses are “fair” in any moral sense: Even with frequent all-nighters, Goldman workers probably earned the best hourly wages in the world (an average of about $200 per hour, assuming a 60-hour week; the firm’s top traders, meanwhile, reportedly made $17,000 to $33,000 an hour.) In a country where some people are starving and others are furiously debating a $1 increase in the minimum wage, such bonanzas provide a startling reminder of the inequities of our free-market economy.

Within a more limited context, however — pay for performance — the compensation is fair, and Goldman’s employees have every right to view it as such. Capitalism works because it encourages and rewards those who successfully take risks, adapt to change and develop profitable opportunities. Goldman Sachs employees, arguably, are consistently better at those things than any other group of employees in the world. Yes, they have the good fortune of working in a hot industry in a favorable market environment. But they have taken spectacular advantage of both.

This year, even after paying themselves and their other expenses, Goldman’s employees generated an average of about $550,000 of pre-tax profit apiece. This is twice as much as the employees of Lehman Brothers, another strong Wall Street firm ($228,000). It is more than the employees at G.E. and Microsoft. It is even more than the employees at Google, another fantastically profitable wealth-generation machine.