Added On: Saturday, December 22, 2007

Goldman Awards Blankfein a Record $67.9 Million Bonus

By Christine Harper

Dec. 21 (Bloomberg) -- Goldman Sachs Group Inc., the world's biggest securities firm, awarded Chief Executive Officer Lloyd Blankfein a record $67.9 million bonus in 2007 as mortgage losses drove his counterparts at Morgan Stanley and Bear Stearns Cos. to forgo year-end payouts.

Blankfein, 53, will receive $26.8 million in cash, and $41.1 million in restricted stock and options, the New York- based firm said in a regulatory filing. Co-Presidents Gary Cohn, 47, and Jon Winkelried, 48, will each receive restricted shares and options valued at about $40.5 million, up from $25.7 million last year. Cash payments weren't disclosed for anyone other than Blankfein, who reaped a record-setting $53.4 million last year.

Goldman shattered Wall Street profit records for the fourth-consecutive year even as banks and securities firms including Citigroup Inc. and Merrill Lynch & Co. were forced to take at least $96 billion of writedowns. Goldman set aside $20.2 billion to pay employee salaries, benefits and bonuses, 23 percent more than last year.

``There are successful people and then there's extraordinary success, and they're trying to show as a firm that they're really extraordinary,'' said Jeanne Branthover, managing director of Boyden World Corp., an executive recruiter in New York. ``They're rewarding him for leading such a fabulously successful ship.''

While Blankfein's pay climbed 27 percent from 2006, compensation for Morgan Stanley CEO John Mack and Bear Stearns chief James ``Jimmy'' Cayne plummeted as their companies suffered from the collapse of the subprime mortgage market.

$40 Million to Zero

Mack and Cayne, who each received $40 million last year, aren't taking any bonuses after reporting the first quarterly losses in the history of their firms.

Morgan Stanley, the second-biggest U.S. securities firm, awarded Co-President Walid Chammah an $8.9 million stock bonus for 2007, the highest among the firm's executives, according to regulatory filings today. Chammah, 53, was granted 173,679 restricted shares yesterday, when they closed at $51.37 in New York trading, company said.

Co-President James Gorman, 49, received 155,380 restricted shares valued at $7.98 million. Morgan Stanley, based in New York, didn't disclose any cash payments in today's filings.

Chammah and Gorman succeeded Zoe Cruz and Robert Scully in November, after Cruz, 52, was forced out amid the firm's trading losses. Scully, 57, moved to the newly created office of the chairman. In 2006, Cruz received $18.9 million of stock and options, while Scully got $12.7 million.

Metals Salesman

Lehman Brothers Holdings Inc., which reported a 5 percent increase in 2007 net income, boosted CEO Richard Fuld's year-end stock bonus by 4 percent to $35 million.

Last year, Goldman gave Blankfein $27.3 million in cash, $15.7 million in restricted stock and options to buy shares that the firm valued at almost $10.5 million at the time. Added to his $600,000 salary, he made a total of $54 million. Blankfein's salary is unchanged this year.

``Goldman Sachs are just in a league in their own, they're an outlier when it comes to compensation,'' said Henry Higdon, managing partner of recruiting firm Higdon Partners LLC in New York.

Blankfein, a Harvard-educated lawyer who grew up in Brooklyn and joined Goldman as a metals salesman in 1982, took over as CEO from Henry Paulson last year. Paulson, now U.S. Treasury secretary, took his bonus in stock during each of the last three years he headed the firm. By contrast, Blankfein has taken some of his bonuses in cash.

Viniar's Take

The firm will disclose cash bonuses for the other executives in its annual proxy statement next year. Last year Goldman paid Cohn and Winkelried cash bonuses of $26.7 million each, bringing their 2006 pay to $53 million apiece.

David Viniar, 52, Goldman's chief financial officer, received an 81 percent increase in the non-cash portion of his bonus this year -- the biggest of any executive. He was awarded restricted stock and options worth about $34.5 million this year, up from $19.1 million in 2006.

John Weinberg, 50, a vice chairman and co-head of investment banking, was granted restricted stock and options valued at about $19.1 million, up from $15.1 million in 2006.

Co-General Counsels Gregory Palm, 59, and Esta Stecher, 50, were each given $9.1 million in restricted shares and options. Smaller awards were distributed out to Alan Cohen, global head of compliance, Sarah Smith, the firm's principal accounting officer, and Kevin Kennedy, who runs human resources.

Goldman rose $6.93, or 3.4 percent, to $209.60 at 4 p.m. in New York Stock Exchange composite trading. The stock has risen 5.1 percent this year, compared with a 23 percent decline in the 12-member Amex Securities Broker/Dealer Index.

Morgan Stanley has fallen about 20 percent this year. Bear Stearns is down almost 45 percent.


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