According to proxy advisory firm Glass Lewis, shareholders of Goldman Sachs Group Inc should vote against the proposed executive compensation as the board has 'failed to link pay with performance'. The advice was provided by the proxy advisory firm through a report last Monday.
Furthermore, shareholders should vote against director James Johnson as the position of chairman for the compensation comittee and his previous roles at public companies contributed to the financial issues and scandals that affected the firm.
Glass Lewis justifies its recommendation by saying that the company provides short term compensation benefits on a 'purely discretionary basis' that is now within the shareholders' best interests. According to a Reuters report, Wall Street banks are being pushed by the Federal Reserve to use formula metrics to determine executive compensations.
In a statement, Glass Lewis said, ""We believe shareholders benefit when incentive awards are determined on the basis of metrics with pre-established goals and are thus demonstrably linked to the performance of the company, aligning the interests of management with those of shareholders. In this case, shareholders should be seriously concerned with the Company's failure to implement a formula-based short-term incentive plan with objective metrics and goals."
"The CEO (Goldman Chairman and CEO Lloyd Blankfein) was paid moderately more than the median CEO compensation of these peer companies. Overall, the Company paid more than its peers, but performed moderately worse than its peers,"
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