On Thursday Goldman Sachs unveiled a 2009 compensation program that will see management receive bonuses in stocks rather than cash, with a five-year no-sell limit and a “clawback” provision designed to discourage risk-taking and increase accountability. The program will impact the entire 30-strong management staff, which includes all global, divisional, and regional leadership. It will also give shareholders an advisory vote on compensation levels and principles at the annual shareholders meeting in 2010.
The clawback measures will allow the firm to recapture shares in cases where “the employee engaged in materially improper risk analysis or failed sufficiently to raise concerns about risks.” The change is part of an effort by the firm to “attract, retain and motivate talent, without encouraging excessive risk-taking.”
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