Goldman Sachs – Continuing to Set the Standard for Financial Douchebaggery

Comment from thebrackpipe.com:  So, Mr. Blankfein wrote in a November op-ed piece in The Wall Street Journal that tax increases are a necessary part of U.S. fiscal reform.  He wrote, “I believe that tax increases, especially for the wealthiest, are appropriate, but only if they are joined by serious cuts in discretionary spending and entitlements.”  I think what he meant to write was, “Tax increases are necessary but there is no way that I’m giving up MY cash.”

Article below by Liz Moyer, Steven Russolillo and Patrick McGee of the Wall Street Journal:

Goldman Sachs Group Inc. handed insiders including Chief Executive Lloyd Blankfein and his top lieutenants a total of $65 million in restricted stock just hours before this year’s higher tax rates took effect.

The New York securities firm gave 10 of its directors and executives early vesting on 508,104 shares previously awarded as part of prior years’ compensation, according to a series of filings with the Securities and Exchange Commission late Monday.

Almost half the shares were withheld to satisfy the insiders’ tax obligations, according to the filings.

Such vesting of previously granted restricted shares typically takes place in January, when Goldman also pays out bonuses for the prior year.

The early awards weren’t limited to the top officers, a Goldman spokesman said. He declined to say how many people at Goldman received the early vesting or to elaborate on the timing of the move.

Goldman’s decision is the latest illustration of the lengths large U.S. companies have gone to shield their stakeholders from the higher taxes that loomed throughout the so-called fiscal cliff standoff at the end of 2012. Congress on early Tuesday morning passed legislation that includes the largest tax increases in the past two decades.

Goldman’s move could shield its executives from increased tax rates, which will rise as high as 39.6% in 2013 from 35% last year.

Mr. Blankfein wrote in a November op-ed piece in The Wall Street Journal that tax increases are a necessary part of U.S. fiscal reform.

“I believe that tax increases, especially for the wealthiest, are appropriate, but only if they are joined by serious cuts in discretionary spending and entitlements,” he wrote.

Goldman isn’t the only U.S. company taking action in response to the higher taxes. Corporations announced more special dividends last month than in any other December since at least 1955.

Borrowing by blue-chip U.S. companies more than tripled from a year earlier in the final two months of 2012 to finance these payouts.

Warehouse retailer Costco Wholesale Corp., casino operator Las Vegas Sands Corp. LVS +0.06% and department store chain Dillard’s Inc. are among the large U.S. companies announcing accelerated or special dividends in late 2012.

The tax on dividends, about 15% in 2012 thanks to cuts that took place under President George W. Bush, will rise to as high as 20% in 2013.

At Goldman, Mr. Blankfein, President and Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar each received total vesting of 66,065 shares worth $8.4 million.

Mr. Blankfein received 2011 compensation valued at $16.2 million and Messrs. Cohn and Viniar each received $15.8 million, according to regulatory filings.

John Weinberg and Michael Evans, vice chairmen, each also received a total of 66,065 shares, according to Goldman’s disclosures this week.

Others whose restricted shares were vested on Monday included John Rogers, an executive vice president and chief of staff; Edith Cooper, executive vice president and global head of human capital management; Alan Cohen, executive vice president and global head of compliance; Gregory Palm, executive vice president and general counsel; and Sarah Smith, principal accounting officer.

Two other members of Goldman’s executive committee, Michael Sherwood and Mark Schwartz, didn’t have any shares vest on Dec. 31. Mr. Sherwo

The vesting comes at the end of a year in which Goldman shares rallied more than 40% amid reduced investor fear over the European debt crisis and a general improvement in the company’s business.

Some 483 companies announced special dividends in December, compared with 142 in the same month a year ago, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

All told, 1,056 special dividends were announced in 2012, Mr. Silverblatt said. That is up from 460 a year earlier and the most since 1973, according to Mr. Silverblatt. In the last two months of 2012, blue-chip U.S. nonfinancial companies sold $178 billion of bonds. That compares with $60.6 billion a year earlier, according to data tracker Dealogic.

Mr. Blankfein and other corporate chiefs had pushed Washington lawmakers to find a solution that would prevent a consumer spending slowdown that threatened to send the economy back into recession.

In a series of postings Wednesday on Twitter, Mr. Blankfein praised Congress’s action. “This agreement is a step forward to injecting growth and investor confidence into the U.S. economy.”

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