Goldman slashes top executives’ bonuses after public pressure

In a sign it is concerned about Main Street anger over bankers’ compensation, Goldman Sachs Group Inc decided to give its CEO Lloyd Blankfein and other top executives lower bonuses than many had expected.

Goldman, which reported a record profit for 2009, will pay the executives bonuses in stock worth $9 million each, far below what they got in the previous record profit year of 2007. Blankfein received $67.9 million for that year.

The bonus, which was less than the roughly $16 million that rival bank JPMorgan CEO Jamie Dimon was rewarded with earlier in the day, was far below the $100 million that at least one British newspaper had predicted.

The decision follows months of criticism of Goldman, partly because of expectations that its soaring profits would lead to massive bonuses just over a year after it was aided by the government through bailout funds and other financial support.

Blankfein’s bonus is such that he will not even be among the highest paid people at Goldman, the firm he has run since 2006.

Star traders and bankers within Goldman’s ranks will almost certainly be receiving more.

“He is going to have a lot of people two levels below him who are making more than he does,” said Alan Johnson, a Wall Street Compensation consultant.

Blankfein’s bonus is an increase from last year, when he did not take one. He received a base salary of $600,000 for 2009.

The firm made it clear in a statement that external pressures had contributed to the decision.

“The firm produced very good results for 2009, but the environment is very difficult and the board was mindful of that difficult environment in making decisions about executive compensation,” Goldman spokesman Lucas van Praag said.

Blankfein, along with President and Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar, received 58,381 stock units, worth $8.99 million based on Friday’s closing share price.

The units do not convert into shares until 2011 at the earliest, and once converted they cannot be sold or transferred before January 2015, according to the filing.

The smaller than expected pay packages were the latest sign of how Goldman has sought to soften its image after being excoriated by some commentators and politicians for reaping huge profits after benefiting from various forms of government help.

Blankfein, himself, has found himself in the spotlight time and again during the past year, most notably after he told London’s Sunday Times newspaper in November that banks serve a social purpose and are doing “God’s work.”

The backlash against Goldman has fuelled efforts in Washington to enact reforms against the banking industry and to crack down on banker pay.