Large pension funds along with Glass Lewis and Institutional Shareholder Services have lined up against ratifying the compensation packages of Goldman Sachs Group Inc.’s top executives, including Lloyd C. Blankfein, chairman and CEO.
The $186.8 billion California State Teachers’ Retirement System, West Sacramento; $178.3 billion Florida State Board of Administration, Tallahassee; C$171.4 billion ($132.4 billion) Ontario Teachers’ Pension Plan, Toronto; and $126.6 billion Texas Teacher Retirement System, Austin, plan to vote against the executive compensation, according to their proxy-voting disclosures. The say-on-pay vote is non-binding.
Mr. Blankfein’s total pay was $22.3 million in 2015, down 2% from 2014. The 2015 total pay of the other four top executives listed ranged from $20.5 million to $24.6 million. .
“There is a disconnect between CEO pay and company performance,” FSBA said in its disclosure.
Glass Lewis said in a report it graded the pay packages an “F.” “A properly structured pay program should motivate executives to drive corporate performance, thus aligning executive and long-term shareholder interests. In this case, the company has not implemented such a program. Furthermore, we note that the company received pay-for-performance grades of ‘D’ and ‘F’ in our 2015 and 2014” reports, the report said.
ISS said in its report: “Several financial measures were negatively impacted by a $3.37 billion legal settlement; however, this expense was excluded from financial measures underlying pay considerations. … Additional concerns remain that cash (long-term incentive plan) awards, which have the potential to grow exponentially over their long performance periods, could produce outsized payouts far into the future.”
The pension funds, Glass Lewis and ISS support a shareholder non-binding proposal calling for Goldman Sachs to have an independent chairman.
Glass Lewis said an independent chairman “is nearly always preferable to having a single individual lead both the board and the executive team.”
Regarding the board composition, CalSTRS, Florida SBA, Texas Teachers and ISS oppose the re-election of Lakshmi N. Mittal as a director. In addition, CalSTRS and FSBA oppose the re-election as director of M. Michele Burns. FSBA was critical of Ms. Burns serving on boards of five public companies. CalSTRS also opposes the re-election as directors of William W. George, James A. Johnson and Debora L. Spar. All five directors are members of the board’s compensation committee, responsible for setting executive pay.
FSBA and ISS in their analysis opposed Mr. Mittal for serving on too many boards while serving as chairman and CEO of ArcelorMittal SA, a steel and mining company.
Goldman Sachs’s annual meeting is Friday in Jersey City, N.J.