The curious case of Goldman’s disappearing December

By Felix Salmon
April 15, 2009

As far as its financial statements are concerned, Goldman Sachs’s 2008 ended in November. Its 2009 began in January. In between was possibly the worst month in its history.

Heidi Moore is charitable:

The move effectively eliminated a very ugly month from Goldman’s official annual financial results for both 2008 and 2009, although that was likely not the bank’s intent.

John Hempton is less so:

Am I surprised that Goldies had an “orphan month” and stuffed the bad news in it? No. If you were – then obviously you are new to investment banking.

I suspect that when it comes to bonus time at Goldman, December 2008 will never matter. The 2008 bonuses will be paid based on the 2008 fiscal year, while the 2009 bonuses will be paid based on the 2009 fiscal year. And those $1.3 billion of losses in December — losses which will never show up in any annual report — will be conveniently ignored by the compensation honchos.

Attention Eliot Spitzer: just when you think things can’t get any more shameless, they do. Your hopes that stakeholders will finally start throwing their weight around when it comes to compensation will never come to pass.

Update: Goldman tells Floyd Norris that “the change in fiscal year was required when it converted to a bank holding company”. But as Norris notes, relegating the December results to “a table deep in the announcement” was not in the requirements.

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