Goldman’s annual meeting: tame and tweeted
, May 24 (Reuters) – For all the security staff, rules of conduct and a warning that troublemakers would be kicked out, the most noteworthy event at Goldman Sachs Group Inc’s annual meeting on Thursday was a mild tweet.
“We are now live on Twitter (finally) at the GS Annual Meeting,” Goldman’s Twitter account said in its first tweet at 9:38 a.m. on Thursday. “Follow us here for updates on our work, our research, and our people.”
The bank, which recently embarked on a campaign to restore its tattered public image, also used Twitter to publicly announce the results of its shareholder votes. All 10 Goldman directors were voted in, top executives’ pay was approved and shareholder resolutions opposed by the bank were rejected by wide margins.
The tweets were the latest sign of Goldman’s new attitude toward the public and the media.
The notoriously media-shy bank recently hired a new public relations executive, former Obama administration official Richard “Jake” Siewert. He has been trying to spruce up Goldman’s image by making executives more available to the press and getting the company’s PR operation more in line with a changing media landscape.
At the meeting on Thursday, Chairman and Chief Executive Lloyd Blankfein, President Gary Cohn and other senior executives could be seen joking and chatting casually with reporters, seeming unusually at ease.
The charm offensive comes after a former employee published a scathing opinion piece in March, accusing Goldman of routinely ripping off clients. The public response to the New York Times op-ed was swift and harsh, and senior executives have said it was a wake-up call that the bank needed to become more proactive in telling its side of the story.
Goldman sets $40 billion clean energy investment plan
(Reuters) – Goldman Sachs Group Inc plans to channel investments totaling $40 billion over the next decade into renewable energy projects, an area the investment bank called one of the biggest profit opportunities since its economists got excited about emerging markets in 2001.
Goldman executives said this week that demand for alternative energy sources will grow with global energy demand, and as big manufacturing countries, including China and Brazil, set more aggressive targets for reducing emissions. The bank plans to finance deals with clients’ money and, to a lesser extent, its own funds.
Goldman, which plans to announce the new target at its annual meeting on Thursday, already invests in clean technology. In 2011, it helped finance $4.8 billion in clean technology companies globally, and co-invested more than $500 million in that area. The new target would average out to $4 billion a year, leading some analysts to minimize the target as more of a “charm offensive” than a new initiative.
In 2005, Goldman pledged to invest and finance $1 billion of environmentally friendly projects. By the end of 2011, the company had exceeded its goal, arranging $24 billion worth of financing and investing $4 billion into such projects, said Kyung-Ah Park, head of environmental markets at Goldman.
The bank’s new $40 billion target applies to investments and financings for solar, wind, hydro, biofuels, biomass conversion, energy efficiency, energy storage, green transportation, efficient materials, LED lighting and transmission.
Goldman has also pledged to reduce its own net carbon emissions to zero by 2020.
Bankers to get bonus bumps in 2012: survey
May 16 (Reuters) – Big banks are expected to use a larger portion of profits for employee bonuses this year, despite extensive job cuts and a recent outcry from shareholders over excessive pay, according to a closely watched survey of Wall Street compensation.
Bonuses are expected to rise 5 percent to 15 percent for employees across the financial services industry, with fixed-income traders projected to get the biggest bonus increases, according to forecasts by the compensation consulting firm Johnson Associates.
A chart in the Johnson Associates report showed compensation and benefits inching up toward 68 percent of investment and commercial banks’ profits in 2012, from about 63 percent last year. The figures are a median projection for eight large banks, based on Johnson Associates’ consulting work year-to-date.
The projected rise comes despite significant job cuts, weaker profit estimates from analysts and investor frustration with big pay packages at some banks.
In April, 55 percent of Citigroup Inc shareholders rejected a plan to pay Chief Executive Vikram Pandit $15 million. The vote was non-binding, but was viewed as an embarrassment for Citi’s board and management.
Shareholders have been more supportive of pay packages at other big U.S. banks including JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co and Morgan Stanley, but big banks in the U.K. including Barclays PLC and Royal Bank of Scotland Group PLC have also faced investor backlash over proposed executive pay packages.
Goldman Sachs Group Inc shareholders will vote on that bank’s pay proposal at its annual meeting on May 24.
Anti-Wall St protesters upstage Morgan Stanley meet
, May 15 (Reuters) – Anti-Wall Street protesters upstaged Morgan Stanley’s annual meeting on Tuesday, lobbing tough questions at Chairman and Chief Executive James Gorman and shouting negative comments over a bank official who was attempting to read a tally of shareholder votes.
The 53-year-old CEO kept his cool through the meeting, but took protesters to task after one accused him and the board of directors of “immoral” and “unethical” practices. Among protesters’ complaints were the bank’s high pay packages, job cuts and financial reform lobbying efforts.
“I take umbrage at the suggestion that our board did anything unethical and I can’t just let that sit out there,” said Gorman.
He went on to say that although some of Morgan Stanley’s business practices, including mortgage servicing, had been poor in the past, “I don’t regard those as immoral or unethical.”
After engaging in debate with some members of the protester group, which identified itself as “The 99% Spring” and was similar in tone to the “Occupy Wall Street” movement, Gorman instructed Corporate Secretary Martin Cohen to announce the preliminary shareholder vote tally.
But protesters quickly drowned out Cohen by yelling negative comments about Morgan Stanley and Wall Street.
“We will not be quiet until we create a system that prevents the 1 percent from ripping off the 99 percent,” they chanted in a call-and-response fashion.
Goldman increases Italian debt exposure–filing
May 10 (Reuters) – Goldman Sachs Group Inc bought $2.3 billion worth of Italian sovereign debt during the first quarter, increasing its overall market exposure to troubled European countries, even as it reduced exposure to other risky nations, including Greece.
The Wall Street bank had $2.7 billion worth of bonds, equities, credit derivatives and other securities pegged to Greece, Ireland, Italy, Portugal and Spain as of March 31, according to Goldman’s quarterly filing with the U.S. Securities and Exchange Commission on Thursday.
That compares with market exposure of $580 million to those countries at year-end.
Most of the increase came from Goldman’s purchase of Italian sovereign bonds. Its total positions in Italian securities accounted for $2.4 billion of market exposure to the five so-called “peripheral” euro zone nations. At year-end, its exposure to Italy was nil.
During the quarter, Goldman reduced exposure to Greece and Ireland by $126 million and $478 million, respectively. The bank also added to its short position on Portugal and reduced its short position on Spain, which came in the form of credit derivatives against non-sovereign debt in those countries.
Goldman also increased estimates for the amount of additional collateral or termination payments for derivatives contracts that the bank would have to pay out if it were downgraded by Moody’s Corp, even though Goldman reduced exposure to such contracts by $7.7 billion, or 22 percent.
In the event of a one-notch downgrade, Goldman would need to post another $1.3 billion worth of collateral or termination payments, up 2 percent from the previous quarter. In the event of a two-notch downgrade, Goldman would need another $2.2 billion of collateral or termination payments, up 1 percent.
Best face forward: chin implants surge in popularity
BOSTON (Reuters) – Over the last year Dr. Darrick Antell has performed up to three or four chin implants a day, reflecting a national trend that has seen chin augmentations emerge as the fastest growing plastic surgery trend of 2011.
After about a 45-minute outpatient procedure and a bill ranging from $3,500 to $7,500, New York-based Antell’s patients emerge with what he said is a confidence boost: an athletic, youthful look from a more prominent chin.
“People want that leading lady, leading man look,” said Antell, who is also an assistant clinical professor of surgery at Columbia University.
“If you look at people in the limelight, they all have strong chins and it’s a part of the profile that has long been overlooked,” he said.
Chin implants surged by 71 percent in 2011 as more than 20,600 adults went under the knife to sharpen their jaw lines, up from roughly 12,000 the year before, according to the American Society of Plastic Surgeons.
Strong chins are associated with leadership, confidence and honesty, Antell said, not to mention some powerful men and women.
“Romney’s got a great chin,” Antell said of the presidential hopeful. “Obama has a pretty good chin. Bill Clinton has a very good chin.”
Ferguson’s fury: Harvard historian decries female welfare recipients
Another panel, another group of rich guys talking about income inequality in America.
That seemed to be a running theme of the Milken Global Conference by the time Tuesday afternoon rolled around in Los Angeles – particularly when the well-known and notably tart Harvard historian Niall Ferguson took to the stage to decry single welfare moms as lazy drags on society.
Ferguson was responding to comments made by Jeff Greene, the billionaire real estate investor and Democrat who lost (badly) a 2010 bid to represent Florida in the Senate.
Greene recalled a single mother with five children he met on the campaign trail. She was fat (“over 300 lbs”) and depended on a welfare check of just over $600 to put food on the table for her kids, once numbering five. But one kid died in a gang fight, another was locked up and two others were involved in gangs and the drug trade, Greene recalled.
“She could barely take care of herself, much less her kids,” he said, resigned to the idea that this unnamed woman would never work or even attempt to work, much less wean herself off welfare.
While Greene was busy commenting on how society needed to change for the sake of those kids and other members of the future workforce, Ferguson cut him short.
Why, he wondered, was Greene letting this lady off the hook? Why doesn’t she get up off her fat lazy butt and get a job?!, he demanded, with his Scottish brogue in full Braveheart mode.
Is that a bailout in your pocket?
There was an awkward moment of tension at the Milken Global Conference in Los Angeles, when a buysider on one panel asked a Wall Street banker whether he had pocketed taxpayers’ bailout cash.
The tit-for-tat began when several panelists at the “Outlook for M&A” session began griping about the U.S. government’s tax policy, which they said dissuades corporations from bringing overseas profits back home because of punitive taxes.
The panelists – including James Casey, co-head of global debt capital markets for JP Morgan, Anthony Armstrong, an investment banker at Credit Suisse, and Raymond McGuire, global head of corporate and investment banking at Citigroup – predicted that the M&A market might get a big boost if the U.S. were to offer a tax holiday of sorts for repatriated profits.
They also suggested such a move could be a boon for hiring and economic growth: Tilman Fertitta, a panelist who is chairman and CEO of the consumer products company Landry’s, said he would certainly feel the incentive to do more deals and invest more at home if he could bring back his overseas profits without being taxed. He even wondered why Mitt Romney and Barack Obama hadn’t made such a proposal a key point in their election campaigning.
But just before the executives could launch into a profit repatriation samba, another panelist stopped the music.
Maria Boyazny, CEO of distressed debt investing firm MB Global Partners, pointed out that previous government actions that were supposedly intended to spur the economy had only saved Too Big To Fail banks and bolstered the financial industry’s fortunes. (“No offense to anybody on the panel,” she said in that but-I’m-going-to-offend-you-anyway tone.)
In the intervening time, she said, corporate America has only gotten richer by cutting jobs and hoarding capital. She then wondered aloud where all the $700 billion in bailout money and trillions of dollars in Federal Reserve stimulus programs had actually gone.
Nomura hires ex-Diamondback, SAC Capital trader
April 27 (Reuters) – Nomura Holdings has hired Michael Rome, a former trader at the hedge f unds SAC Capital and Diamondback Capital Management, for its U.S. equities trading business, according to three sources familiar with the matter.
The hire is Nomura’s latest as it builds its North American operation. The Japanese bank has staffed up and cut down its U.S. investment banking and capital markets business multiple times. The latest round of expansion began in 2009 after Nomura acquired Lehman Brothers’ Asian and European businesses and sought to fill in gaps.
Rome, who joined the Japanese bank in February, is now managing a long-short equity portfolio on Nomura’s trading desk in New York, said the sources, who each requested anonymity to avoid damaging business relationships.
Nomura spokesman Jonathan Hodgkinson confirmed that Rome now works at the bank but declined further comment. Diamondback spokeswoman Katrina Allen declined to comment.
Rome also declined to comment when reached by phone on Friday afternoon.
The bank launched a $1.2 billion, cost-cutting plan globally l ast year, but still continued to hire U.S.-based bankers, traders and research analysts from Wall Street competitors inc luding: Gol dman Sachs, Deutsche Bank, Citadel and Millennium Management.
Nomura’s U.S. operation now has 2,350 employees, more than double the 900 it had in March 2009, and plans to h ire more in the coming years. The bank recently signed a le ase for a larger New York office that would allow it to increase staff there by another 50 percent.
Lazard profit drops on costs, but still beats Street
April 27 (Reuters) – Lazard Ltd’s first-quarter earnings dropped sharply because of higher costs, but the boutique investment bank beat analyst expectations by a wide margin when excluding a previously announced charge related to severance packages.
Lazard has had a harder time than some bigger Wall Street rivals in cutting compensation expenses, partly because of contractual obligations but also because it has historically paid a bigger portion of revenue to its investment bankers.
Last quarter, Lazard’s compensation costs of $338.3 million reflected a $25 million severance charge, as well as higher levels of deferred compensation that stem back to 2008.
The company has lately taken steps to cut both staff and pay because it is unclear whether financial markets have fully recovered, Chief Financial Officer Matthieu Bucaille said in an interview.
“We always have to be very careful that we’re adequately staffed, in particular given the uncertainty in the broader economic environment,” said Bucaille. “I think we are scaled at this stage to benefit from a recovery in the markets.”
Lazard paid out nearly 70 percent of its net revenue in compensation last quarter, a higher ratio than bigger Wall Street rivals Goldman Sachs Group Inc, Morgan Stanley and JPMorgan.
But Bucaille said that underlying pay packages directly related to first-quarter performance reflected an assumption that Lazard will pay out 60 percent of its revenue, down from an adjusted rate of 62 percent in 2011.
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