Goldman's Bonus Backlash Solution: Give to Charity?

A less than enthusiastic reaction from bloggers. Will anything short of nixing bonuses appease critics?

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A New York Times report that Goldman Sachs is weighing a "charity requirement" for its bonuses is raising critics' eyebrows. This isn't the first time the company has attempted to head off populist rage during bonus season. Like previous plans, this new charity measure floated by the bankers is being flatly rejected by observers who don't care for Goldman's array of alternatives. Fairly or not, critics want the bonuses cuts, and aren't going to be seduced by distracting counteroffers.

  • This is a Public Opinion Poll, writes Bess Levin at Dealbreaker, "which is why this [New York Times] story--Maybe Goldman Sachs Will Make Its Employees Give Money To Charity, Maybe It Won't, It's All Relative--was leaked to the media."
  • Public Opinion Here: Not Convinced Goldman "is trying to find a way to avoid a PR disaster," explains Good's Morgan Clendaniel. " Not giving enormous bonuses, a potentially foolproof PR strategy, seems to have not come up." Clendaniel doesn't find the charity idea an adequate substitute: "Simply put, giving to charity doesn't rack up karma points if you didn't think to do it yourself."
  • This Doesn't Make Much Sense "Why would only 'executives and top managers' be required to participate?" wonders the Atlantic's Daniel Indiviglio, eyeing the report. Calling mandatory charity "a little creepy," he also points out that "more charity by these high earners means more tax deductions and less revenue for Uncle Sam. If Goldman does institute this policy, government officials should pray that the rest of Wall Street doesn't follow." He, too, looks to the obvious solution: cutting back on bonuses. "Shareholders ... might prefer if that money was set aside for bigger dividends instead of soup kitchens. This would still accomplish some good PR, with smaller bonus levels, but still keep the earnings in the family, so to speak."
  • If Smaller Bonuses, Bigger Salaries Noting that Goldman employees will already be put-out by receiving bonuses in the form of stock rather than cash, New York Magazine's Jessica Pressler argues out that the charity idea is "unsustainable going forward." She quotes another source as saying the company is also thinking about replacing bonuses "with the more traditional 'huge-ass salary.'"
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