Put down the pitchforks; disperse the mob. Yes, it was reported that Goldman Sachs CEO Lloyd Blankfein may receive a $100 million bonus, but, no, business bloggers aren't really buying it.
The London Times reported the news today, attributing the shocking figure to bankers from rival firms speaking anonymously at the annual World Economic Forum meeting in Davos, Switzerland. "Some rival bankers claim Mr Blankfein could receive up to $100 million," The Times' Helen Power reports. Still, the blogosphere is skeptical for three main reasons:
- How Would They Know? One can almost hear the shock in Felix Salmon's voice at the fact that anyone would believe the story: "It goes without saying, of course, that Goldman's rivals couldn't possibly know what Blankfein's bonus is going to be," he wrote in a blog post. "It frankly boggles the imagination that he's going to get anywhere near $100 million." He's certain the number is not just wrong, but way off: "It'll probably be in the eight figures, but it won't be anywhere near $100 million. No matter what Helen Power heard from gossipy bankers in Davos."
- Goldman's Direct Denial The firm has come out pretty strongly against the news. A Goldman spokesman called it all "speculative nonsense" and told MarketWatch's John Spence that "everything Goldman Sachs has said and done in terms of compensation this year gives the lie to The Times story." It's a pretty direct denial, but there's more. Goldman spokesman Lucas Van Praag put it a bit more bluntly to DealBreaker: ""There's speculation, and there is stupidity. This speculation transcends the simply stupid and takes it to an entirely new level." Okay, now that's just mean.
- Point Gun At Foot. Shoot. Giving out a $100 million bonus while the government is already mulling bank regulation would "boldly dare President Obama to do something to stop it," argues Daily Finance's Peter Cohan. It would also be a move against Goldman's own lobbying efforts, says The Wall Street Journal's Michael Corkery:
At this point, it is not clear whether the Volcker Rule would apply to Goldman, which is a bank holding company but doesn't hold customer deposits. That could leave the door open for Goldman to lobby its way out of the proposed restrictions. A $100 million bonus for Blankfein wouldn't seem to help Goldman's calling card in Washington at a time it may need it most.