Monday, January 11, 2010 10:59:50 AM
Illinois Pension Fund Sues Goldman Over Bonus Plans
Suit says bonuses "highlight the complete breakdown" of corporate oversight, saying Goldman’s payouts harm shareholders.
(January 11) -- An Illinois pension fund sued Goldman Sachs last week in an attempt to
recover billions of dollars in bonuses and other compensation being
awarded for 2009, despite the banking giant having accepted government
bailout funds.
According to the Central Laborers' Pension Fund’s suit filed
Thursday in New York’s Supreme Court, the fund bought Goldman Sachs
shares in January of last year. The suit alleges that by September 25,
Goldman had set aside nearly $17 billion for employee compensation and
might distribute more than $22 billion for the year.
The suit says that such sums, and Goldman's practice of continuing
to pay out nearly 50% of net revenue as compensation, show "scant
regard" for the interests of shareholders, according to Reuters.
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Goldman Sachs had required a $10 billion injection from the federal
government's Troubled Asset Relief Program and received $13 billion
from insurer AIG after the government bailed it out. In June of last
year, the New York-based bank repaid the TARP money.The suit mirrors a trend of pension funds suing financial institutions, coming shortly after a Virgin Islands pension fund sued Morgan Stanley over CDO sales.
To contact the ai5000 editor of this story: Kristopher McDaniel at kmcdaniel@assetinternational.com