Goldman Sachs employees’ stock awards beat tax increase

Posted Jan. 02, 2013, at 6:58 p.m.

Goldman Sachs accelerated delivery of $65 million in stock awards to 10 executives, including Chief Executive Officer Lloyd Blankfein, helping them avoid higher tax rates that take effect this year.

The awards are restricted stock granted for years prior to 2012, according to 10 separate filings made public about 8 p.m. Dec. 31. Each executive surrendered 45 percent to 50 percent of their awards in order to pay taxes, according to the filings. Goldman Sachs stock climbed 41 percent in 2012, its first annual gain since 2009.

Goldman Sachs, the fifth-biggest U.S. bank by assets, typically delivers executives’ restricted stock during January. The decision to speed up the delivery came as the U.S. Congress debated and ultimately passed a bill that would increase tax rates on capital gains and on individuals who make taxable income of $400,000 or more.

“The December delivery of shares went to a wider group of employees than the named executive officers” who were included in the filings, said Michael DuVally, a spokesman for the New York-based firm. He declined to comment on the reason for the accelerated delivery or on which other employees received stock early.

Blankfein, 58, has said he would be willing to pay higher taxes if they were part of a fiscal compromise to reduce the budget deficit. On Wednesday he praised the bill that passed the House on Tuesday.

“This agreement is a step forward to injecting growth and investor confidence into the U.S. economy,” he said in an emailed statement. “While more progress clearly will be needed, particularly in regards to restraining the growth in government spending, this measure lays the foundation for more economic growth.”

Blankfein received 66,065 shares of restricted stock on Dec. 31, worth $8.43 million at the closing share price that day, according to a company filing. The filing shows that he sold 33,245 shares for $126.24 apiece, although a footnote explains that those shares were in fact retained by the company “to satisfy withholding obligations.”

Gary Cohn, 52, Goldman Sachs’ president and chief operating officer, and David Viniar, 57, the firm’s chief financial officer, received the same number of shares as Blankfein and had the same amount withheld, according to filings. The other executives who received and surrendered shares for withholding purposes were Vice Chairmen John Weinberg, 55, and Michael Evans, 55; Edith Cooper, the 51- year-old head of human capital management; John F.W. Rogers, the firm’s 56-year-old chief of staff; General Counsel Gregory Palm, 64; Global Head of Compliance Alan Cohen, 62; and Chief Accounting Officer Sarah Smith.

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