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BLOOMBERG NEWS / ANDREW HARRER
BROWN PRESIDENT RUTH SIMMONS in Washington last October. She joined Goldman Sachs’ board in 2000.
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PROVIDENCE – Brown University President Ruth J. Simmons and her colleagues on Goldman Sachs Group Inc.’s board voted Friday to award its chairman and chief executive, Lloyd Blankfein, a $9 million all-stock bonus for 2009.
Blankfein, 55, was given 58,381 shares of restricted Goldman Sachs stock, which he can’t sell for at least five years, but no cash, according to a regulatory filing. He also receives a $600,000 annual salary and a number of benefits, such as a car and driver.
The 10-member Goldman board’s decision was closely watched amid an outcry over sky-high executive compensation. Goldman earned a record profit of $13.4 billion last year, but that was partly thanks to extraordinary government interventions to save the financial system.
By contrast, in 2007, when Goldman earned $11.6 billion, Simmons and the other board members awarded Blankfein a bonus of $67.9 million.
In an interview with The Brown Daily Herald last week, Simmons said she did not think her service on the Goldman board would have a negative effect on Brown. The president also serves on the Texas Instruments board.
“I don’t see how it could funnel into the university,” Simmons said, referring to public criticism of Goldman’s compensation practices. “It could funnel to me, but not to the university.”
If her work at Goldman “put Brown in a difficult position,” Simmons said, she would be “very concerned.”
The Goldman board’s compensation committee, which includes Simmons, made the decision quickly, according to The New York Times.
Last Thursday, the committee agreed to hold a meeting the following day. Some of them met at Goldman’s Manhattan headquarters on Friday, while others attended by telephone. A Brown University spokeswoman was not immediately available to say whether Simmons attended in person or by phone.
An anonymous source “close to the board” told The Times that Goldman’s directors felt strongly that they needed to show an appreciation of the anger directed at the financial industry’s pay practices by holding down Blankfein’s compensation.
The Wall Street Journal, also citing anonymous sources, reported that Simmons and the other Goldman directors deliberated for weeks about how big the bonuses should be. The word “restraint” was used frequently by the board and executives, according to the paper.
“We really aren’t deaf and blind,” Goldman Chief Financial Officer David Viniar said last month.
The board already voted in December to give investors a nonbinding vote on executive compensation. That will happen later this year at the company’s annual meeting.
Simmons, who became a Goldman Sachs director in 2000, earned $323,539 in 2008 for serving on the board. As of March, she also owned 34,899 shares of Goldman’s common stock, which were worth $5.27 million at the close of the market Monday.