Time to hug Goldman?
Goldman Sachs, the world's most successful investment bank - the highest form of life in the liberal-financial-market jungle - has this afternoon announced changes to its 2009 comp programme.
"Comp" or "compensation" is bankese for pay. Which always seems to me an example of doublespeak that only a banker could construct - because some would argue that it's the rest of us who should be compensated for the mess the bankers have made of the economy, not the bankers who need compensating for dreaming up schemes to disguise the riskiness of their practices from regulators and investors.
Anyway Goldman's board has decided that the firm's "entire 30-person management committee" will "receive 100% of their discretionary compensation in the form of 'shares at risk'" which can't be sold for five years.
Arguably this will better align the interests of Goldman's bosses with the 80% of stockholders who don't work for the firm.
But it's not obvious that it conspicuously aligns Goldman's senior partners pay with the preferences of the rest of the world's citizens.
Goldman's banking aristocracy will still be pocketing bonuses worth up to $50m or $60m each on the back of profits earned from the exceptionally buoyant trading conditions created by governments' and central banks' exceptional measures to resuscitate economies.
Naturally their inability to turn that into hard cash right now will spark some sympathy in a few of us.
But others might well say the principle that a partner should hold stock till he or she leaves the firm is a pretty sound one, for all seasons.
In fact, keeping shares till exit has been the norm at Goldman since time immemorial anyway.
And as for the absence of any cash bonus, well for Goldman's top bods cash was already only about 20% of typical payouts.
So it looks to me as though this isn't much of a revolution and the ancient regime looks undisturbed.