“Ill Informed And Frankly, Stupid”
by digby
So the new Pecora Commission publicly convenes tomorrow and they will be asking all the Masters of the Universe about their bonuses. Of particular interest, of course, is Goldman Sachs, which is evidently slated to hand out record breaking bonuses despite receiving TARP funds, issuing bonds backed by the FDIC and benefiting hugely by the government rescue of AIG. Apparently, it’s our privilege as American taxpayers to have such godlike creatures walking among us.
ABC News has prepared a nice little primer so you can understand who the top beneficiaries are and what they do:
Goldman Sachs CEO Lloyd Blankfein will be among the chief executives set to appear tomorrow at the first public hearing of the Financial Crisis Inquiry Commission, and his firm will be back in the public crosshairs later this month when it announces what is expected to be a $20 billion-plus compensation kitty. Some of Goldman’s top traders and bankers stand to earn at least $10 million each.
[…]
A Goldman spokesman said “the speculation about compensation is ill-informed and, frankly, pretty stupid.”
Here are 10 who most likely are in line to clear at least $10 million:
The Traders
Pierre-Henri Flamand is a French-born 39-year-old who was rumored to have been paid $100 million a few years ago (Goldman denied it). Flamand is the London-based global head of Goldman’s purely proprietary trading group, Goldman Sachs Principal Strategies. Goldman CEO Blankfein has said pure prop trading is only 10 percent of the firm’s trading revenues and profits.
Ashok Varadhan, one of Goldman’s top fixed-income guns, is the global head of foreign exchange trading in North America. Varadhan, who made partner in 2002 at age 29, owns luxury digs in the same New York apartment building as Blankfein. Varadhan’s dad, Srinivasa, teaches math at New York University. He had a brother, Gopal, who worked as a trader for Cantor Fitzgerald and was killed in the 9/11 attacks on the World Trade Center.
David Heller joined Goldman in Asia in the late 1980s. He has risen within the firm, becoming the head of global equity a few years ago. Last year, he was named co-head of the Securities Division. Goldman’s equities division delivered $2.8 billion in revenues in the third quarter alone. “Heller is possibly the one person other than Gary [Cohn, Goldman’s president] who could someday succeed Blankfein,” said one Wall Street headhunter.
Ed Eisler is head of interest rate trading, which is part of Goldman’s most profitable division, Fixed Income Commodities and Currency. The FICC group contributed the lion’s share of the firm’s $24 billion in trading revenues recorded through the first nine months of the year.
The Money Managers
Raanan Agus, 41-year-old manager of Goldman Sachs Investment Partners, a $7 billion hedge fund created at the start of 2008. Agus, a world-class chess enthusiast who is known to prefer Honda minivans to Hummers, runs the GSIP fund within Goldman’s asset management division, which has nearly $1 trillion under management. Through the first half of the year, Agus’ GSIP, which had a rocky 2008, was said to have had gains of around 6 percent.
Marc Spilker, who helps run Goldman’s entire massive investment management business, recently made the kind of headlines his bosses hate. He got into a vitriolic public dispute with his East Hampton neighbor, hedge fund heavyweight Jim Chanos, over a shared pathway to the beach near their homes. Spilker’s area produces nearly $1 billion in revenues each quarter.
The Salespeople
Harvey Schwartz, Goldman’s head of global sales and a co-head of the firm’s securities division. “People don’t realize how much sales drives Goldman’s business,” said one Wall Street headhunter. “Harvey is always among the firm’s best paid people.”
Isabelle Ealet, London-based global head of commodities and who runs the sales team for this hugely successful trading operation. She ranks No. 32 on Fortune magazine’s list of the most powerful women in business.
The Bankers
Gordon Dyal, global head of mergers and acquisitions. According to Deallogic, Goldman ranked No.1 in global M&A transactions through the first three-quarters of the year. Its investment banking division had produced $3.2 billion in net revenue. In one of the biggest fee-generating deals of the year, Goldman advised Burlington Northern Santa Fe when the railroad was bought out for $44 billion by Warren Buffett’s Berkshire Hathaway.
Richard Friedman, 51-year-old head of Goldman’s merchant banking division. A few years ago he helped pull off the historic initial public offering of the Industrial and Commercial Bank of China. Goldman has maintained a modest investment stake in ICBC, which continues to produce eye-popping returns — ICBC shares yielded Goldman $1.1 billion worth of revenue through the first nine months of 2009.
We’re not worthy.
One thing these people really seem to hate is being treated like well … commoners. The least the government can do is make them squirm — and hopefully more than that. These bonuses are largely to blame for the culture that got us here. It’s absolutely mind-boggling that one year after the near collapse of the whole enchilada they are right back at it. It’s ill-informed and frankly, stupid.
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