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Goldman Sachs pays bonuses before fiscal cliff vote

Bonuses usually paid in January by Goldman Sachs were made before the new year as US Congress voted on higher taxes

03 Jan 2013 Accountancy Age

By Calum Fuller

goldman-sachs-2010

GOLDMAN SACHS paid out bonuses to ten of its top executives hours before the US Congress voted to raise taxes on America's wealthiest, in order to avoid the higher rates.

The investment bank paid out $65m (£39.9m) in restricted stock, narrowly avoiding the higher rate for those earning more than $400,000 per year, which was brought in on New Year's Day. Such awards are usually made to the bank's executives on January, but the awards were disclosed in filings made public on New Year's Eve, reports the Financial Times.

The awards included 508,104 shares worth about $65m based on Goldman's closing price 30 December 2012. Executives including chief executive Lloyd Blankfein, COO Gary Cohn and chief of staff John Rogers were among the recipients.

The accelerated delivery of the bonuses is somewhat surprising, given Blankfein's recent remarks on the fiscal cliff and the taxation of the wealthy.

He wrote in the Wall Street Journal that "tax increases, especially for the wealthiest, are appropriate", adding those increases, in conjunction with spending cuts, would lead to a "balanced solution to the debt problem".

A spokesperson for Goldman told the Financial Times the awards went to a "wider group of employees than the named executive officers", but did not explain why the bonuses had been issued earlier than usual.

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