Here's a fun one: Goldman Sachs may require its mostly highly compensated employees to donate a portion of their pay to charity. Could the firm the American public views as a "great vampire squid wrapped around the face of humanity" be growing a heart? The New York Times reports that the talks for creating such a policy are still ongoing, but it could happen. Yet, to me this looks a lot more like a very transparent public relations campaign to quell populist outrage than the bank really feeling it should give back, which means that the firm kind of misses the point.
First, the NY Times explains that this isn't the first time a big bank would institute a rule mandating charitable giving:
The charity idea would be similar to a decades-long program at the failed investment bank Bear Stearns, which required more than 1,000 of its top workers to give 4 percent of their pay to charity each year and then checked their tax returns to ensure compliance.
Because when I think about a firm I'd want to emulate, I think of Bear Sterns. Obviously the program must not be meant to enhance the stability of the firm or the prudence of its bankers and traders.
My first question is: why would only "executives and top managers" be required to participate? Sure, they're the ones making tens and hundreds of millions, instead of seven measly figures, but pretty much every Goldman employee can afford to give a little something back. That only the richest of its bankers would need to comply with this new rule shows just how shallow an effort it really would be.
Second, I bet I can guess who wouldn't be a fan of this program: local and federal governments. More charity by these high earners means more tax deductions and less revenue for Uncle Sam. If Goldman does institute this policy, government official should pray that the rest of Wall Street doesn't follow.
I also wonder how shareholders will feel about this proposal. They 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.
Even though these bankers and traders could surely afford a required charitable contribution, I find it a little creepy to require someone to be generous. Sure, it would benefit charities out there, which would presumably put that money to good use. But the idea of requiring people to give to others feels a little too much like a company pushing its morals upon its employees. Of course, you could argue that's what the government does through taxes too....
It also, ultimately, fails to address why so many Americans hate Goldman. By forcing its employees to give chunks of their compensation to charity, the firm merely reinforces what everybody thought: that its bankers and traders are greedy scoundrels, clutching onto their dollars like Scrooge McDuck. As a result, I think that such a policy could almost be counterproductive from a PR standpoint.
Yet, I'd be willing to bet that Goldman employees already give tens or even hundred of millions of dollars to charity each year. Instead, why not just continue to softly urge Goldman employees to be charitable and make sure they're well aware of lots of options to make giving logistically simple. Then the firm could document that giving and let the world know how generous its bankers really are, without coercion.
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