Goldman Sachs (GS): How I Voted – Proxy Score 13

Goldman Sachs ($GS) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/24/2012. Voting ends 5/23 on Moxy Vote’s proxy voting platform, which had 13 recommendations “from good causes,” but five are actually consolidations, when I checked and voted on 5/21. had  funds voting.  I voted with management 13% of the time.

I make it a practice to vote against pay packages where NEOs were paid above median in the previous year. Yes, I know, this is pretty crude analysis. I’ll make exceptions where something obviously warrants different treatment. However, I’m concerned that NEOs are taking a greater and greater portion of wealth generated by companies.

According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay, Oxford Review of Economic Policy, Vol. 21, Issue 2, pp. 283-303, 2005), the aggregate compensation paid by public companies to their top-five executives during the period 1993-2003 totaled about $350 billion, and the ratio of this aggregate top-five compensation to the aggregate earnings of these firms increased from 5 percent in 1993-1995 to about 10 percent in 2001-2003.

At the same time, few firms want to admit to having average executives, so they seek to compensate their executives at above-average levels. They survey executive compensation at corporations and then set compensation packages that are above average for their “peer group,” which is often chosen aspirationally. While the “Lake Woebegone effect” may be nice in fictional towns, “where all the children are above average,” it doesn’t work well for society to have all CEOs considered above average and their collective pay spiraling out of control.

GS’s SummaryCompensation Table shows that Lloyd C. Blankfein, CEO/Chair, was the highest paid named executive officer (NEO) at about $16.1M in 2011. I’m using Yahoo! Finance to determine market cap and  Wikipedia’s rule of thumb regarding classification. According to those sources, at about $49B AMZN is a large-cap company. According to the United States Proxy Exchange (USPX) guidelines (pages 9&10), using data from Equilar, the median CEO compensation for large-cap corporations was $10.8 million in 2010, so GS’s pay is well above that median. I voted against the pay plan and the compensation committee members: James A. Johnson and all the directors except Claes Dahlbäck and Lloyd C. Blankfein.

With regard to shareowner proposals, I voted in favor of Evelyn Y. Davis’ proposal for cumulative voting. If we had that, we might get a true shareowner representative on the board. I also voted in favor of John Harrington’s proposal that NEOs retain 75% of the shares acquired through the Company’s compensation plans, excluding tax-deferred retirement plans, for at least three years from the termination of their employment (through retirement or otherwise). This would discourage scam accounting and would encourage a longer-term outlook, in the best interest of long-term shareowners. Additionally, I voted with the Needmor Fund for the disclosure of political contributions. Our company spends millions on lobbying and other political expenditures. Shareowners should at least know where our money is going and what it is buying.

On all other proxy items, I voted as recommended by management.

Mark your calendars; here’s the deadline for proposals by shareowners for next year:

Shareholders who, in accordance with the SEC’s Rule 14a-8, wish to present proposals for inclusion in the proxy materials to be distributed by us in connection with our 2013 Annual Meeting of Shareholders must submit their proposals to John F.W. Rogers, Secretary to the Board of Directors, at The Goldman Sachs Group, Inc., 200 West Street, New York, New York 10282. Proposals must be received on or before December 14, 2012. As the rules of the SEC make clear, however, simply submitting a proposal does not guarantee its inclusion.

Blankfein occupies both CEO and Chair positions. That seems like a conflict of interest to me, since the Chair can properly lead an evaluation of the CEO if they are one and the same.

 According to, special meetings at GS can only be called by shareowners holding at least 25% of the voting power and no action can be taken by written consent of shareowners without a meeting. Those seem likely subjects for future proposals. My proxy access proposal failed to make it through the no-action process this year. However, depending on what reforms, if any, GS makes this year, I may submit a revised version of proxy access.

And here’s how I actually voted, using Moxy Vote’s proxy voting platform but with‘s display, which is a little tighter with regard to display.

Proxy ItemsHow I Voted
1Elect Director Lloyd C. BlankfeinFor
2Elect Director M. Michele BurnsAgainst
3Elect Director Gary D. CohnAgainst
4Elect Director Claes DahlbackFor
5Elect Director Stephen FriedmanAgainst
6Elect Director William W. GeorgeAgainst
7Elect Director James A. JohnsonAgainst
8Elect Director Lakshmi N. MittalAgainst
9Elect Director James J. SchiroAgainst
10Elect Director Debora L. SparAgainst
11Advisory Vote to Ratify Named Executive Officers’ CompensationAgainst
12Ratify AuditorsFor
13Provide for Cumulative VotingFor
14Stock Retention/Holding PeriodFor
15Report on Lobbying Payments and PolicyFor

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