Despite profits of $4.78 billion for Q4 2009 — more than JP Morgan, Merryl Lynch, Bank of America and Citigroup combined — the firm’s $16.2 billion in employee compensation was the “lowest ever compensation to net revenues ratio,” said CEO Lloyd Blankfein [pictured].
While $16 billion may be low for Goldman, it’s a fortune for anyone else. Will the move do anything to help the company’s reputation?
One shareholder, The Southeastern Pennsylvania Transportation Authority (SEPTA), filed a lawsuit yesterday over the bonuses, saying Goldman employees are “unreasonably overpaid.”
“They still have a reputation problem,” said Scott Tangney, executive vice president and practice head of the financial and professional services divisions at agency Makovsky and Co. in a phone interview with PRNewser today. Tangney said the SEPTA lawsuit “is a big issue” because they are an institutional investor, and “that is the clients they service.”
“In an environment when you have 10% or more unemployment, and your next door neighbor has been out of work, is it really fair that a bank that did take government funding to help them make it through a very bad patch in last twelve months, that they make these types of profits? The American public is saying no,” he said.
Tangney’s remarks echo those of Burson-Marsteller CEO Mark Penn, who said in November that the financial services industry, specifically Goldman Sachs, “has a very big job ahead of it,” and “it’s going to take years to work through this.”
MORE: According to YouGov BrandIndex, a poll with 5,000 respondents, consumer sentiment of the company has trended down this month. To obtain the Goldman Sachs buzz score the poll asked respondents: “If you’ve heard anything about the brand in the last two weeks, was it positive or negative?” On December 1st, their buzz score was -18.3. On January 1st, they were down to -24.4. As of yesterday, the score was -26.1.