Thursday, October 22, 2009

For an article about whether Goldman Sachs will create an image problem due to its 2009 success—and huge employee bonuses—one year after the financial crisis broke, Bloomberg interviews corporate governance expert James Post, the John F. Smith, Jr. Professor in Management at Boston University. The report says,

Goldman Sachs Group Inc., on pace to top 2007’s record $20.12 billion in compensation, may find that acts of largess aren’t enough to mitigate a public backlash sparked by the firm’s bonuses.

After rebounding from the worst financial crisis since the Great Depression, Goldman Sachs is considering a new charitable program and has been working with Bridgespan Group, a Boston- based philanthropy consulting and recruiting firm....[But] “They’re still paying out enormous sums of money, which objectively don’t register very well on Main Street,” said James Post, a professor of corporate governance and ethics at the Boston University School of Management. “How many billions would they have to pledge? It would take a lot.”

From the article “Goldman Bonus Stigma May Overshadow Charitable Effort,” by Christine Harper and Patrick Cole, Bloomberg, October 15, 2009.