Goldman Sachs Group Inc. paid its board members stock and other compensation averaging $640,000 in 2007, making them the best-paid directors among 367 financial companies studied by a corporate governance research firm, dpa reported.
The 10 outside directors at New York-based Goldman Sachs received a total of $6.4 million, mostly in stock, the Corporate Library said in a report released yesterday. The study of 2007-08 proxy statements from more than 3,000 firms showed director pay rose 11.8 percent from the group's year-earlier report.
Executive pay is under increased scrutiny as the U.S. government spends $700 billion to rescue banks amid the worst economic crisis since the Great Depression. Goldman Sachs got $10 billion under the Troubled Asset Relief Program last year and said Feb. 4 it wants to repay the money to escape limitations, including compensation restrictions, that came with the infusion.
Financial company boards, "for a relatively well- compensated lot, didn't do that great a job as far as monitoring the actions of management," Paul Hodgson, co-author of the study, said in an interview. Goldman Sachs directors in 2007 were paid less cash and more in stock than their counterparts at Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., according to the study.
"We compensate our non-executive directors based on the hard work they do," Goldman Sachs spokesman Michael DuVally said in an interview. "Compensation is typically in the form of equity, thus aligning their interests with those of our shareholders."
Goldman Sachs eliminated 2,500 jobs in the fourth quarter of last year and cut average pay per worker 45 percent to $363,654 as the firm posted the first quarterly loss since going public a decade ago. Chief Executive Officer Lloyd Blankfein gave up his bonus after converting the firm to a bank-holding company.
Median compensation for directors at Standard & Poor's 500 companies was about $200,000 and about $120,000 for all companies studied, according to the report.