It's not just pitchfork-wielding populists, politicians, and bloggers complaining about big Goldman Sachs (GS) bonuses. Nuns are after them, too.

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BOSTON, MA. & NEW YORK CITY///October 14, 2009///Goldman Sachs is issuing its much anticipated earnings announcement on Thursday (October 15, 2009), and is expected to set aside up to $20 billion for executive bonuses. In view of this action coming so quickly on the heels of the federal bailout money issued to the company during the height of the financial crisis last year, investors are responding by mounting major proxy initiatives.



The Nathan Cummings Foundation and the Benedictine Sisters of Mt. Angel, Oregon announced today that they have filed a shareholder resolution urging the Board to review pay disparity at the company and analyze the appropriateness of its spiraling pay packages – packages that have an unprecedented impact on Wall Street compensation in general



The resolution, which is expected to gather more co-sponsors, has been filed early to challenge Goldman Sachs as the Board makes final decisions on bonuses. It was filed to appear in the 2010 proxy and be voted on at the stockholder’s meeting. Goldman Sachs had received resolutions calling for shareholders to have an Advisory Vote on executive compensation that received a 46% vote in favor, but the Board has resisted implementing even that modest reform. Other investors may also file resolutions calling for a “say on pay” or for separation of board chair and CEO positions at Goldman Sachs.



Laura Shaffer, who is director of shareholder activities of the Nathan Cummings Foundation and one of the resolution’s sponsors, stated: “This request is especially timely as Goldman Sachs rushes to pay huge bonuses, setting an example that many Wall Street firms will no doubt strive to emulate. As shareholders, the ripple effects of this extraordinary compensation are especially concerning. Executive compensation accounts for a considerable portion of aggregate earnings and as firms like Goldman hand over ever larger sums to their executives, these spiraling pay packages will have increasingly significant impacts on investors’ returns.”



Sister Judy Byron, who coordinates the faith-based Northwest Coalition for Responsible Investment and is a longtime proponent of this resolution, said: “Goldman Sachs’ announcement of record bonuses is a stark reminder about how executive compensation is spiraling out of control for many firms. It is important that citizens and shareowners both act as voices of reason. As Fortune reminded us in 2007, top executives earn 364 times the pay of the average worker. CEO pay increases significantly for many executives even in rough times, while layoffs skyrocket and pay for average employees stagnate.



Laura Berry, executive director of the Interfaith Council on Corporate Responsibility, said: “As prudent investors, we have a responsibility here to act as the conscience of Wall Street, especially when it fails to do so on its own. How is it possible that the year after billions of taxpayer’s dollars helped companies like Goldman Sachs return to financial health, this company shows absolutely no restraint? Goldman Sachs is poised to become the poster child of the company that drives income disparity in the United States.”



FULL RESOLUTION TEXT



Recent events have increased concerns about the extraordinarily high levels of executive compensation at many U.S. corporations. Concerns about the structure of executive compensation packages have also intensified, with some suggesting that the compensation system incentivized excessive risk-taking.



In a Forbes article on Wall Street pay, the director of the Program on Corporate Governance at Harvard Law School noted that, “compensation policies will prove to be quite costly—excessively costly—to shareholders.” Another study by Glass Lewis & Co. declared that compensation packages for the most highly paid U.S. executives “have been so over-the-top that they have skewed the standards for what’s reasonable.” That study also found that CEO pay may be high even when performance is mediocre or dismal.



In 2008, Federal Appeals Court Judge Richard Posner stated that, “executive pay is out of control and the marketplace cannot be trusted to rein it in.” Legislative attempts to address executive compensation include the Excessive Pay Shareholder Approval Act, which mandates that no employee’s compensation may exceed 100 times the average compensation paid to all employees of a given company unless at least 60% of shareholders vote to approve such compensation.



A 2008 piece in BusinessWeek revealed that, “Chief executive officers at companies in the Standard & Poor’s 500-stock index earned more than $4,000 an hour each [in 2007].” It also noted that an S&P 500 CEO had to work, on average, approximately 3 hours in 2007 “to earn what a minimum wage worker earned for the full year.”



A September 2007 study of Fortune 500 firms showed that top executives’ pay averaged $10.8 million the previous year, or more than 364 times the pay of the average U.S. worker. Another study by the Economic Policy Institute found that between 1989 and 2007, average CEO pay rose by 163% while the wages of the average worker in the United States rose by only 10%.



RESOLVED: shareholders request the Board’s Compensation Committee initiate a review of our company’s executive compensation policies and make available, upon request, a summary report of that review by October 1, 2010 (omitting confidential information and processed at a reasonable cost). We request that the report include –



1. A comparison of the total compensation package of senior executives and our employees’ median wage in the United States in July 2000, July 2004 & July 2009.



2. An analysis of changes in the relative size of the gap and an analysis and rationale justifying this trend.



3. An evaluation of whether our senior executive compensation packages (including, but not limited to, options, benefits, perks, loans and retirement agreements) are “excessive” and should be modified to be kept within reasonable boundaries.



4. An explanation of whether sizable layoffs or the level of pay of our lowest paid workers should result in an adjustment of senior executive pay to “more reasonable and justifiable levels” and whether Goldman Sachs should monitor this comparison going forward.



ABOUT THE GROUPS



The Benedictine Sisters of Mt. Angel, Oregon have a 125 year history of service to the poor, creating community, and promoting stewardship of Earth.



The Nathan Cummings Foundation is rooted in the Jewish tradition and committed to democratic values and social justice, including fairness, diversity, and community. It seeks to build a socially and economically just society that values nature and protects the ecological balance for future generations; promotes humane health care; and fosters arts and culture that enriches communities.



The Interfaith Center on Corporate Responsibility (http://www.iccr.org) is a coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital. ICCR members bridge the divide between morality and markets by envisioning a civic economy that integrates ethical, environmental and social values. Inspired by faith, committed to action, ICCR members work to build a just and sustainable global community.



The Northwest Coalition for Responsible Investment (NWCRI) is a regional collaboration of 16 faith-based investors committed to using their rights as shareholders to work with corporations to promote economic, social and environmental justice.