Good move: Goldman Sachs executives are forgoing their annual bonuses. First time in the firm’s 139-year history, but it’s the right thing to do.
New York State will take the tax hit:
The executives complied with the urging of New York Attorney General Andrew Cuomo and others who said in November that major Wall Street companies benefiting from federal bailouts shouldn’t pay out the usual huge bonuses to executives.
Paterson says it was the right thing to do, but the result is a further hit to the fiscal crisis of state government.
“Things could go even more south in a big hurry,” Paterson told reporters.
Losing tax revenue from bonuses was a big hit to New York’s finances because Wall Street taxes accounted for 30 percent of state revenue in the last fiscal quarter.
“I think it was the right urge,” he said, but “the state lost $178 million in that moment.”
The decision by Goldman Sachs’ top executives to forgo bonuses in 2008 forced other investment bank bosses to follow suit. Thousands of lower-tier brokers will still collect their hefty bonuses, however, because their employers don’t want to lose their top talent.
Certainly a more positive move than flying, then driving (sort of), from Detroit to Washington earlier this month for the CEOs of GM, Ford and Chrysler.
Ford Motor Company, in turning down the government bailout offer, scored big in terms of public opinion.