Executive Compensation - Say on Pay

2010 – Goldman Sachs Group Inc.

 

 

RESOLVED, that shareholders of Goldman Sachs Group Inc. request  the board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis).  The proposal submitted to shareholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.

 

Supporting Statement: Investors are increasingly concerned about mushrooming executive compensation especially when it is insufficiently linked to performance.   Federal policy makers are concerned as well.  In 2009, all companies that received federal Troubled Asset Relief Program (TARP) funds – including Goldman Sachs – were required to include such an advisory vote in their proxy materials.  Pending legislation would require such a vote at all companies.

      

Because Goldman Sachs repaid its TARP funds to the federal government, there will be no requirement that such an Advisory Vote be included in the 2010 proxy.  We are urging the Board to implement such a policy as a corporate governance best practice.

      

In 2009, Goldman Sachs set aside a significant portion of their revenue for employee bonuses.  Many shareholders have raised concerns about the size of the bonus pool, and how it is to be distributed.  An Advisory Vote would give shareholders an opportunity to provide direct feedback on this and on other executive compensation policies and practices.

      

An Advisory Vote establishes an annual referendum process for shareholders about senior executive compensation. We believe the results of this vote would provide the board and management useful information about shareholder views on the company’s senior executive compensation.

      

We believe that existing U.S. Securities and Exchange Commission rules and stock exchange listing standards do not currently provide shareholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast, in the United Kingdom, public companies allow shareholders to cast a vote on the “directors’ remuneration report,” which discloses executive compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior executive compensation.

      

We believe that a company that has a clearly explained compensation philosophy and metrics, reasonably links pay to performance, and communicates effectively to investors would find a management sponsored Advisory Vote a helpful tool.

 

We urge our board to allow shareholders to express their opinion about senior executive compensation through an Advisory Vote.