International Brotherhood of Electrical Workers Local 98 Pension Fund, Philadelphia, filed suit against Goldman Sachs Group, accusing it of overpaying its executives while underpaying its shareholders and damaging its stock price.
The suit, filed March 8 in Delaware Court of the Chancery in Wilmington by the $562 million pension fund, seeks to stop Goldman Sachs from allocating 47% of its 2009 net revenues to compensation.
Also, the suit seeks to require that Goldman Sachs management bear the cost of the $500 million the firm pledged in November for philanthropic and lending support for small business as an “apology for taking enormous bonuses.” It also wants management to be responsible for paying any fees imposed by the government on banks in reaction to their excessive compensation practices.
Also named as defendants are Lloyd C. Blankfein, chairman and CEO; the other 11 Goldman Sachs directors; and two non-director executives, David A. Viniar, executive vice president and CFO, and J. Michael Evans, vice chairman.
“Goldman’s employees are unreasonably overpaid for the management functions they undertake, and shareholders are vastly underpaid for the risk taken with their equity,” the suit states.
The pension fund is a Goldman Sachs shareholder. The number of shares it owns wasn’t available.
“We believe this lawsuit is completely without merit,” said Ed Canaday, Goldman Sachs spokesman.
Brian Burrows, IBEW, Local 98, president, referred calls to Steven Marino, an attorney with the Marino, Conroy and Coyle law firm, representing the fund. Mr. Marino, as well as Pamela Tikellis, an attorney with the Chimicles and Tikellis law firm, and John Harnes, an attorney with the Chitwood Harley Harnes law firm, both also representing the fund, couldn’t be reached.