Goldman Sachs Sued by Shareholder

In criticizing the banksters' relentless pillaging of their own corporate coffers, I have often remarked that as long as shareholders continue to allow themselves to be robbed that it was hard to feel too much sympathy for them. Now (at last), one of these former patsies is finally making some “noise”.

The International Brotherhood of Electrical Workers, whose pension fund is a shareholder of Goldman Sachs Inc, filed suit against Goldman Sachs to recover money on behalf of itself and other shareholders, with respect to the excessive “performance bonuses” paid out by this oligarchy - alleging that these payments “vastly over-compensate management and constitute corporate waste”.

There can be no argument here, although obviously GS's lawyers will fight this tooth-and-nail. The Goldman Sachs bankers, along with the other Oligarchs have no one but themselves to blame. Not only is the absolute amount of these bonuses obscene and excessive, compared to every other compensation package in the history of the world, but there is simply no objective justification, of any kind, for such enormous payments.

I got a laugh when I heard one of the banksters arguing that their pay packages were not excessive when compared with professional athletes. This comparison is ludicrous, in a number of ways. To begin with, these athletes are over-paid for their talents because they are “entertainers”. In other words, being an elite athlete does not (by itself) result in big pay-cheques (excluding commercial endorsements, which are totally separate from the athletes' performance).

What professional athletes are compensated for is their ability to directly increase revenues, and thus profits for the company that hires them. An athlete does not get paid millions of dollars per year for hitting 50 home-runs a season, an athlete gets paid millions because hitting 50 home-runs a season will sell tens of thousands of additional tickets to watch the athlete perform – not to mention the enormous profits from merchandizing the athlete's image. I'm unaware of a single banker whose appeal is great enough to sell hundreds of dollars worth of their own personalized merchandize – let alone the millions which top-athletes generate for their employers.

Not only is the connection between compensation and revenue direct, but the very nature of professional sports is that the performance of the athletes is quantified and analyzed through a multitude of statistics. In other words, an individual athlete can objectively quantify his/her worth and if those quantifiable performance statistics deteriorate, compensation falls (subject to some small premium being assigned for “experience”).

In contrast, not only are there no objective (transparent) statistics to quantify the value of the banksters' work (and thus justify compensation), but the Wall Street Oligarchs undermine their own claims by insisting on rewarding poor performance. The “bonuses” that the Oligarchs gave themselves in 2008 – the year they would have destroyed their entire sector, if not for $10 trillion in loans/hand-outs/guarantees – still amounted to one of the highest totals on record.