According to an article in the New York Times, published yesterday, 7 senior executive from Goldman Sachs have opted to receive zero bonuses at the end of this year. This move serves as a challenge to Goldman's competitors to rise to the occasion and do the same. The article states, that "the move could also ease political pressure on Goldman Sachs and reduce negative reaction to what is expected to be a bleak fourth-quarter earnings report from the bank in December, including perhaps its first loss of the credit crisis."
With executive compensation in the spotlight these days, I find it somewhat noble for these top execs to forgo their bonuses during such a rough economy. That doesn't mean that I feel sorry for them, seeing as they already have millions of dollars in the bank to lean on, but I do think it is something for others to pay attention to.
2 comments:
I believe the move by Goldman Sachs was most strategic in earning back some trust of the tax payers. The unselfish act will lower some of the recent political pressure on the company but will act as only a small stepping stone in the financial industry. If other institutions will follow this act, (many of which have already) there may be an increase in the employment rate due to the top executives sacrificing some of their own profit instead of cutting jobs.
Bonus is created as an incentive for employees (mostly managers) to put their high efforts, to care for the sake of the company. I think it's very logical for CEOs to cut their bonuses. Obviously, the company didnt do well. It's not to blame them for everything, but they r surely responsible for a big part of this downfall. hehe, maybe I have no empathy for them because i've never been a CEO. lol.
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