Goldman Sachs Group Inc said on Sunday its Chief Executive Lloyd Blankfein and six other top officials will not get bonuses for 2008.
Blankfein, Presidents and Co-Chief Operating Officers Jon Winkelried and Gary Cohn, Chief Financial Officer David Viniar, and three vice chairmen -- J. Michael Evans, Michael Sherwood and John Weinberg -- asked the board's compensation committee Sunday morning that they not receive a bonus, spokesman Lucas van Praag said.
The compensation committee met and agreed, Praag said.
The executives will only be eligible for a base salary of $600,000 each, the 'Wall Street Journal' reported.
Last year, Blankfein made $68.5 million, Winkelried and Cohn got $67.5 million, and Viniar got $57.5 million. The compensation of the other three was not disclosed.
New York Attorney General Andrew Cuomo said Goldman had taken "an important step in the right direction."
Last month, Cuomo warned Goldman and eight other banks getting US government money in the first round of capital injections under the $700 billion Troubled Asset Relief Program that using the funds for bonuses might break state law.
"This gesture by Goldman Sachs is appropriate and prudent and hopefully will help bring Wall Street to its senses," Cuomo said in a statement on Sunday. "We strongly encourage other banks to follow Goldman Sachs' step."
Goldman's move comes as the global credit crisis leads to big losses and erodes profit for banks and securities firms.
Banks worldwide have fired more than 150,000 people since the crunch began. Goldman recently fired 3,200 employees, or 10 per cent of its global workforce.
Goldman became a bank holding company regulated by the Federal Reserve in September, along with Morgan Stanley, after Lehman Brothers failed, Merrill Lynch agreed to be bought as financial markets went into turmoil.
On September 16, Goldman posted a 70 per cent drop in quarterly profit, its biggest earnings decline since going public in 1999, as the worst market slump in decades led to weaker-than-expected revenue.
Several analysts expect the company to post a fourth-quarter loss, which would be its first ever as a public company.
Its shares are down 69 per cent so far this year.
Monday, November 17, 2008
Citigroup to cut up to 50,000 jobs - CNBC
NEW YORK (Reuters) - Citigroup Inc plans to cut up to 50,000 jobs, CNBC television said on Monday, as souring economies and global credit conditions cause the U.S. bank with the farthest reach worldwide to retrench.
The cuts are on top of the roughly 23,000 jobs Citigroup has already slashed this year, and would leave the second-largest U.S. bank with about 300,000 jobs worldwide.
Cuts are expected to come from layoffs, the sale of units and attrition, CNBC said. Overall capital expenses may decline as much as 20 percent, and cuts are expected to be deep in investment banking, it said.
Citigroup did not respond to a request for comment.
According to the Associated Press, Chairman Sir Win Bischoff said Monday at a Dubai conference, "What all of us have done, and perhaps injudiciously, we've added a lot of people over ... this very benign period."
The cuts are Chief Executive Vikram Pandit's most dramatic move yet to restore profitability and bolster a sagging share price. Last week, Citigroup's stock fell into the single digits for the first time since Sanford "Sandy" Weill created the company in 1998 from the merger of Travelers Group Inc and Citicorp.
Pandit became chief executive last December and has faced much criticism from investors and others for failing to implement a workable turnaround plan for Citigroup.
The New York-based bank has lost more than $20 billion in the last year, hurt by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.
Pandit was holding a "town hall" meeting for employees Monday morning to discuss the bank's plans.
Shares of Citigroup have fallen 68 percent this year, leaving the bank with a market value of only $51.9 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department's bank bailout plan.
Citigroup was built principally by Weill, who ceded control to Pandit's predecessor, Charles Prince, in 2003.
Analysts believe Citigroup never invested enough in technology or to make the bank's parts work well together.
Its geographic diversity, including operations in more than 100 countries, is now also working against it as customers in such countries as Brazil, India and Mexico find it harder to keep up with their bills.
At the same time, Citigroup's ability to grow at home is relatively limited. Last month, Wells Fargo & Co derailed Citigroup's attempt to buy Wachovia Corp and its $418.8 billion of deposits.
The cuts are on top of the roughly 23,000 jobs Citigroup has already slashed this year, and would leave the second-largest U.S. bank with about 300,000 jobs worldwide.
Cuts are expected to come from layoffs, the sale of units and attrition, CNBC said. Overall capital expenses may decline as much as 20 percent, and cuts are expected to be deep in investment banking, it said.
Citigroup did not respond to a request for comment.
According to the Associated Press, Chairman Sir Win Bischoff said Monday at a Dubai conference, "What all of us have done, and perhaps injudiciously, we've added a lot of people over ... this very benign period."
The cuts are Chief Executive Vikram Pandit's most dramatic move yet to restore profitability and bolster a sagging share price. Last week, Citigroup's stock fell into the single digits for the first time since Sanford "Sandy" Weill created the company in 1998 from the merger of Travelers Group Inc and Citicorp.
Pandit became chief executive last December and has faced much criticism from investors and others for failing to implement a workable turnaround plan for Citigroup.
The New York-based bank has lost more than $20 billion in the last year, hurt by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.
Pandit was holding a "town hall" meeting for employees Monday morning to discuss the bank's plans.
Shares of Citigroup have fallen 68 percent this year, leaving the bank with a market value of only $51.9 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department's bank bailout plan.
Citigroup was built principally by Weill, who ceded control to Pandit's predecessor, Charles Prince, in 2003.
Analysts believe Citigroup never invested enough in technology or to make the bank's parts work well together.
Its geographic diversity, including operations in more than 100 countries, is now also working against it as customers in such countries as Brazil, India and Mexico find it harder to keep up with their bills.
At the same time, Citigroup's ability to grow at home is relatively limited. Last month, Wells Fargo & Co derailed Citigroup's attempt to buy Wachovia Corp and its $418.8 billion of deposits.
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