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Just look at who is in favor of compensation clawbacks, more transparency on derivatives and greater coordination among financial regulators.
Would you believe Lloyd Blankfein, the chief executive of Goldman Sachs?
While Goldman is being cast as the case study of everything that is wrong and retro about Wall Street, the firm itself is aware that the public debate about financial regulation has changed, even if Congress has yet to move on it.
The latest indication of that new-found sensitivity was an address today (full text below) by Blankfein at a financial conference in Frankfurt. As the anniversary of Lehman’s collapse approached, the Goldman CEO touched on many of the topics that have stirred up anger since.
“Compensation continues to generate controversy and anger,β he told the conference. βAnd, in many respects, much of it is understandable and appropriate. There is little justification for the payment of outsized discretionary compensation when a financial institution lost money for the year.β Bankers should receive the bulk of their compensation in deferred equity, he said.
Wall Street pay is so extreme, so removed from what nearly everyone else thinks is within the boundaries of reasonable compensation, that one can be jaded by the continued talk of sky-high bonuses. Even when the absurdity of the pay practices are pointed out — as it is in a new report from the New York attorney general’s office:
..even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks’ financial performance.