12/04/2013 18:33:00

Goldman Lead Director: Reputation a Priority; Blankfein Gets $21 Million in 2012

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By Liz Moyer

Goldman Sachs Group Inc.'s (GS) lead outside director, James J. Schiro, said in his first letter to shareholders accompanying the firm's proxy on Friday that the board is "very focused" on the reputation of the firm as he broadens his role on the board.

The proxy also confirmed that the compensation for Goldman Chairman and Chief Executive Lloyd Blankfein totalled $21 million for 2012, the most since 2008. The pay package included a $2 million salary, a $5.7 million bonus and $13.3 million in restricted stock. Mr. Blankfien's expected 2012 pay was initially detailed in January.

Mr. Schiro's duties have expanded to include setting the board's agenda and approving it. He said the board clarified the duties of its governance committee to manage Goldman's relationships with the outside, guard its reputation and review philanthropic and educational initiatives.

"We continue to be very focused on the reputation of the firm," Mr. Schiro said in his letter. A "public responsibilities" subcommittee of the board's governance committee was formed to focus on reputation, chaired by William George, he said.

Earlier this week, activist shareholder CtW Investment Group said it had withdrawn a proposal on Goldman's proxy calling for an independent chairman, the second such proposal Goldman has faced in two years.

Goldman had initially tried to block CtW's proposal from its proxy, but the Securities and Exchange Commission said it didn't have reason to omit it. CtW said on Wednesday that is withdrawal came after a meeting with Mr. Schiro last month.

In its proxy filing on Friday, Goldman said its board conducted a leadership review in December and decided that "combining the roles of chairman and CEO is the most effective leadership structure for our firm at this time." It added if it decided otherwise it "will not hesitate" to name an independent chairman.

Mr. Schiro's letter didn't directly address the independent chairman issue, but he said he was "acutely aware" of his responsibilities as lead outside director, a role created last year after pressure from another activist shareholder, the pension for the American Federation of State, County and Municipal Employees.

In meetings with shareholders since being named lead outside director, Mr. Schiro said he received "valuable information about matters ranging from strategy, regulation, and compensation philosophy to board composition and structure."

Goldman's board has been in flux in recent years. Last fall two new directors joined, and in January David Viniar became the thirteenth board member after retiring as chief financial officer. Stephen Friedman, a former Goldman chairman, is scheduled to retire from his board membership next month.

Mr. Schiro's letter said the board defined key criteria and responsibilities for executive roles and identified the types of skills that would be needed to perform in those roles as part of its long-term and emergency executive succession planning. And the board's independent directors did an individual evaluation of his performance as lead director.

The proxy also confirmed the previously reported pay details for other Goldman executives.

President and Chief Operating Officer Gary Cohn received $19 million in pay for 2012, including a $1.85 million salary, $5.1 million bonus and $12 million in restricted shares. Mr. Viniar, who was CFO for all of 2012, received the same amounts. J. Michael Evans and John S. Weinberg, vice chairmen, each received $17 million, including salaries of $1.85 million, bonuses of $4.5 million and restricted shares of $10.6 million.

Mr. Schiro's pay as director in 2012 was $539,927, the proxy said.

Write to Liz Moyer at liz.moyer@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

April 12, 2013 13:33 ET (17:33 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.

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