Thread: Goldman Sachs lends money to its cash-strapped executives

Goldman Sachs lends money to its cash-strapped executives

Graeme Wearden guardian.co.uk,
Tuesday 17 March 2009 10.00 GMT

Goldman Sachs is about to start lending money to its own executives because the financial crisis has left them short of cash.

In an indication that some have seen their personal wealth shrivel in recent months, Goldman is offering to lend money to around 1,000 staffers. The New York Times reported today that the bank is prepared to provide loans worth anything from a few thousand to hundreds of thousands of dollars.

The money is being offered because some Goldman employees face cash calls on their investments in some of the bank's own funds. These financial vehicles have invested in real estate and private equity and their value has plunged as the US economy has contracted. Employees who have invested in the funds are contractually obliged to put up more money if required – and the relatively meagre bonuses paid out in 2008 means some are struggling to meet their obligations.

Sources who spoke to the New York Times indicated that the loans were specifically aimed at assisting employees to meet their fund obligations and could not be used for other purposes. Goldman Sachs has not commented except to confirm the existence of the loan programme.

During the boom years, Goldman was famous for its remuneration policies, which were lavish even by the gilded standards of Wall Street. But much of this money appears to have gone back into its investment funds.

One former Goldman partner told the New York Times that a significant number of the bank's partners are now worth less than $5m (£3.6m) each, despite having enjoyed years of multimillion dollar bonuses.

Goldman was forced to give up its treasured investment-bank status last year, so that it could receive emergency funds from the Federal Reserve.

It is also one of many Wall Street firms to receive billions of dollars through the US banking bailout. These companies have been heavily criticised for continuing to pay bonuses for work done in 2008, a year punctuated by massive losses and writedowns across the banking sector.

http://www.guardian.co.uk/business/2009 ... executives

Goldman Sachs is about to start lending money to its own executives because the financial crisis has left them short of cash.

a significant number of the bank's partners are now worth less than $5m (£3.6m) each, despite having enjoyed years of multimillion dollar bonuses.

Boo hoo hoo!!! These poor saps! Maybe we should start a collection for them. How about millions in pieces of paper?!!!

One former Goldman partner told the New York Times that a significant number of the bank's partners are now worth less than $5m (£3.6m) each, despite having enjoyed years of multimillion dollar bonuses.

Awwww, then they should've put some of those multimillion dollar bonues in savings accounts and not lived so large?