Goldman Sachs: Prioritizing Executives Over Shareholders
The Goldman Sachs Group, Inc. (NYSE:GS) is always to be found in the midst of the real movers and shakers of Wall Street, which is why investors love to be a part of it. That being said, there still couldnt have been too many people who didnt cringe at Fridays news that the companys richest are about to get richer, once again leaving behind the hangers-on (i.e. shareholders).
The top 1% at Goldman Sachs Group Inc. will be getting a one-time cash infusion over and above their annual bonuses as thanks for working for the company throughout the Covid-19 pandemic, reported Bloomberg.
The money being funneled to the New York City-based multinational investment bank and financial services companys 400 or so top execs no doubt totals in the millions of dollars, according to unnamed sources close to the company, though the exact amount has not been revealed.
Goldmans management, under pressure to fend off increasingly aggressive poaching on Wall Street, views the extra boosts as a creative solution that will come with a warning, Bloomberg reported. Recipients shouldnt mistake the bumps as part of a new pay floor, two of the people said. When compensation is set next year, managers will ignore the one-time payouts when making comparisons. That lets Goldman leaders dip into the banks pot of riches from 2021 to reward its most-prized employees, while trying to temper expectations -- and costs -- going forward.
The firm, which offers services in investment management, securities, asset management, prime brokerage and securities underwriting, saw its stock close Friday at $380.94, down 2.54%, or $9.86 per share.
Still, it seems as if the companys future has never been brighter. According to Wall Street analysts surveyed by Yahoo, 14 stock analysts have set an average price target of $477.23 for the stock to reach a year from now, with the numbers ranging from a high of $576.00 to a low forecast of $416.00. The average price target represents an 18.40% change from the last price of $403.05.20 days ago.
The company also said on Friday that it has declared dividends on the following series of its non-cumulative preferred stock (represented by depositary shares, each representing a 1/1,000th interest in a share of preferred stock, except for the Series Q Preferred Stock, the Series R Preferred Stock, the Series S Preferred Stock and the Series U Preferred Stock in which each depositary share represents a 1/25th interest in a share):
$239.58 per share of Floating Rate Non-Cumulative Preferred Stock, Series A;
$255.56 per share of Floating Rate Non-Cumulative Preferred Stock, Series C;
$255.56 per share of Floating Rate Non-Cumulative Preferred Stock, Series D;
$343.75 per share of 5.50% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series J;
$398.44 per share of 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K;
$687.50 per share of 5.50% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series Q;
$618.75 per share of 4.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series R;
$550.00 per share of 4.40% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series S; $486.67 per share of 3.65% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series U.
In addition, Goldman Sachs has declared a dividend of $1,000.00 per share of Perpetual Non-Cumulative Preferred Stock, Series E, and a dividend of $1,000.00 per share of Perpetual Non-Cumulative Preferred Stock, Series F.
Two days earlier, on Wednesday, the firms management announced that it will redeem all of the issued and outstanding 0.481% Fixed Rate Notes due Jan. 27, 2023 and all of the issued and outstanding Floating Rate Notes due Jan. 27, 2023 on Jan. 27, 2022. The Fixed Rate Notes have an aggregate principal amount outstanding of $2,250,000,000 and the Floating Rate Notes have an aggregate principal amount outstanding of $750,000,000.
In summary, the wealthiest executives, bondholders and preferred sharholders will be getting huge payouts from Goldman Sachs, but shareholders of the investment bank's common stock are being left out of the party, suggesting that this class of stock is the last thing on the company's mind.
This article first appeared on GuruFocus.
