US: No Bonuses for 7 Senior Executives at Goldman

As public scrutiny of Wall Street pay
intensifies, one bank has already decided what it will award in bonuses
to its top seven executives this year: nothing.

Top executives at Goldman Sachs
sent a request to the company's directors on Sunday asking that they
receive no bonus pay for their work in 2008, and the directors agreed,
a company spokesman said.

The decision is likely to put heavy pressure on Goldman Sachs's competitors, including Morgan Stanley, to take similar action as they decide on year-end bonus figures in the coming weeks.

The
move could also ease political pressure on Goldman Sachs and reduce
negative reaction to what is expected to be a bleak fourth-quarter
earnings report from the bank in December, including perhaps its first
loss of the credit crisis.

It comes after the nation's largest banks, buckling under bad mortgage debts and sinking share prices, won approval for a $700 billion bailout
from the federal government, including $300 billion in direct equity
investments. Goldman and Morgan each received $10 billion. The bailout
package includes some strictures on executive pay, but the industry does not view them as especially strong.

Public officials including the New York attorney general, Andrew M. Cuomo, and Representative Henry A. Waxman,
Democrat of California, have been warning banks not to use any taxpayer
money to award bonuses to executives. Industry lobbyists and interest
groups have also warned executives at the banks that any big pay
numbers this year could generate a significant public backlash.

Both
Mr. Waxman and Mr. Cuomo have requested detailed information from the
nation's largest banks on what they intend to pay this year and how
they structured pay in previous years.

There is a widespread
belief that the way Wall Street awarded bonuses in recent years helped
feed the risky behavior that eventually created big losses on exotic
debt securities and helped create the current crisis.

In a
statement Sunday, Mr. Cuomo said, "This gesture by Goldman Sachs is
appropriate and prudent and hopefully will help bring Wall Street to
its senses. We strongly encourage other banks to follow Goldman Sachs's
step."

Morgan Stanley and other banks are still formulating bonus figures. Morgan Stanley's chief executive, John J. Mack,
took no bonus last year. Morgan Stanley, which took a loss in the
fourth quarter last year but has been profitable all of this year,
declined to comment Sunday. Morgan Stanley posted better results in the
third quarter than Goldman Sachs.

In September, Goldman Sachs
and Morgan Stanley transformed themselves into bank holding companies
that take deposits, take less risk and are subject to more government
oversight. That new structure may limit their ability to generate big
profits, because they cannot use as much borrowed money to make big
investment bets.

In the last several years, Goldman Sachs has
posted some of the biggest profits and paid out some of the biggest
bonuses in Wall Street history. The company's chief executive, Lloyd C. Blankfein,
received a salary and bonus package last year worth $68.5 million.
Goldman Sachs paid its two co-presidents, Gary D. Cohn and Jon
Winkelried, around $67.5 million each last year, more than most chief
executives. All three will receive no bonuses this year.

Others
forgoing bonuses at Goldman Sachs will include the chief financial
officer, David A. Viniar, and the vice chairmen, J. Michael Evans,
Michael S. Sherwood and John S. Weinberg.

All seven executives
told the bank's compensation committee on Sunday that they did not want
to receive bonuses this year. The committee accepted their request,
said Lucas van Praag, a Goldman Sachs spokesman.

"They believe
it's the right thing to do," Mr. van Praag said. "We can't ignore the
fact that we are part of an industry that's associated with ongoing
economic distress."

While Goldman Sachs has not posted a loss,
its shares have been in free fall all year. They rallied slightly in
September after the investor Warren E. Buffett helped shore up fading confidence in the bank with a $5 billion investment.

But the shares quickly resumed their decline. They are off 69 percent this year, at $66.73.

• 186 Financial Services, Insurance and Banking