Goldman Sachs issued its 2013 proxy yesterday and it propmpted stories in both the New York Times and the Wall Street Journal.
The Times' headline focused on the raise Goldman Sachs' directors gave themselves.
"Goldman’s directors, who were already among the best-compensated corporate directors in the country," the Times tut-tutted, "will receive an additional 500 shares, for 3,000 shares a year in compensation, according to a regulatory filing submitted Friday."
That was pretty standard outrage-laced-with-envy-and-superiority for the paper of record, at least for a story on Goldman Sachs.
The Journal story took a more interesting twist.
Online, its headline read "At Goldman, Renewed Focus," implicity reprising last year's big proxy season story -- that Goldman Sachs had listed reputational risk in its inventory of things nvestors should watch.
The Journal led with "Goldman Sachs Group's lead outside director, James J. Schiro, said in his first letter to shareholders accompanying the firm's proxy on Friday that the board is 'very focused' on the reputation of the firm as he broadens his role on the board."
Frankly, as tittilating as blow-out compensation is, I think the Journal had the real story.
Last year, Goldman Sachs said it considered reputation risk worthy of concern. This year, the firm is describing what it's doing about it.
This is either great PR or good governance. Maybe both.
Goldman Sachs, which once had a tin ear for reputational issues, is singing a meoldy her companies should emulate. To wit:
- The firm changed the charter of every Board standing committee to include protecting the firm's reputation among their responsibilities.
- It explicity made the Board's Governance Committee responsible for overseeing the firm's reputation as well as its relationships
with major external constituencies.
- The Governance Committee, in turn, established a subcommittee to review the firm's philanthropic and educational initiatives, as well as to oversee the implementation of recommendations made by the Business Standards Committee established last year.
- Perhaps most telling, Goldman Sachs made Bill George chairman of the Public Responsibilities sub-committee. George, a management professor at the Harvard Business School, was formerly CEO of Medtronics and has written extensively on corporate responsibility.
- Finally, the firm has made "reputational judgment" an explicit factor in the evaluation and compensation of all senior executives, including the CEO.
These steps are promising and, on their face, suggest Goldman is approaching the issue seriously and methodically. You can see the whole proxy for yourself here.
Of course, the Journal couldn't let compensation pass without at least a mention. The second graph of the story repeated the already old news that Goldman Sachs CEO, Llyod Blankfein received $21 million in total compensation last year, the most since 2008.
And for those who didn't get to that graph, it ran a photo of Mr. Blankfein over a caption reading: "CEO Lloyd Blankfein had total compensation of $21 million in 2012."
If Blankfein follows through on his promise to improve Goldman Sachs' reputation by paying more attention to its public responsibilities, he'll have earned it.