(14 December 2009 – USA) Goldman Sachs has announced that the bonuses for its 30-strong management committee will be paid entirely in shares, in an effort to make top tier management accountable for their risk taking decisions.The new structure was announced soon after Britain put in place measures to curb bankers’ bonuses to effectively pay back some of the money the government spent topping up banks during the global financial crisis.
The bank has said that bonuses, in the form of shares, cannot be sold for five years.
This is designed to reduce the incentives for bankers to make risky short-term investments, by introducing longer-term incentives.
Chief executive Lloyd Blankfein, said that the bank believes that the compensation policies are the strongest in the industry and ensures that compensation accurately reflects the firm’s performance.