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Business Forum Wall Street opens higher on bank optimism at News Forum - Reuters - Stocks opened higher on Monday after influential bank analyst Meredith Whitney upgraded Goldman Sachs Group to "buy" and ...

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Old 07-13-2009, 09:01 AM   #1
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Default Wall Street opens higher on bank optimism

Reuters - Stocks opened higher on Monday after influential bank analyst Meredith Whitney upgraded Goldman Sachs Group to "buy" and gave a bullish assessment of the financial sector's likely performance, sparking hope that quarterly results may be surprisingly strong.

Wall Street opens higher on bank optimism
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Old 07-14-2009, 09:42 PM   #2
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Here we go again...

The return of the $773,000 paycheck
July 14, 2009: Goldman Sachs, Wall Street's biggest name, is socking away a record bonus pool even as the economy struggles.
The Goldman Sachs gravy train is back on track. The New York-based securities firm posted a $3.4 billion second-quarter profit Tuesday. The firm is clearly bouncing back from the fall market meltdown that prompted government officials to prop up Goldman and its rivals with taxpayer dollars. The first-half rebound should bode well for Goldman's 29,400 workers when bonus season rolls around. The average Goldman worker could end up taking home between 12 and 15 times the typical American family's income.

In the first half of 2009, Goldman reported compensation expenses -- reflecting the cost of salaries, benefits and severance payouts, as well as estimated year-end bonus payments -- of $11.4 billion. That's up from $8.5 billion in the first half of 2008 and $11 billion in the first half of 2007. Were the firm to set aside bonuses at the same rate in the second half, the compensation pool would hit a record $22.8 billion -- and the average Goldman worker would stand to make $773,000 for 2009, more than doubling their 2008 take. That would eclipse the $662,000 Goldman spent on its average worker in 2007, according to the firm's regulatory filings. Median household income was $50,233 in 2007, according to the most recent Census Bureau data.

Some fans of the firm don't believe Goldman's payout record is ready to fall just yet. Guy Moszkowski, an analyst at Bank of America/Merrill Lynch who rates the stock buy, estimated last week that Goldman's compensation costs would rise 64% in 2009 to $17.9 billion -- or $609,000 per employee. While the firm tends to set aside about half of revenue for compensation expenses in the first three quarters of a given year, it often accrues proportionally less in the fourth quarter, when bonus decisions are made. In recent years Goldman has paid out between 42% and 49% of full-year revenue as compensation, according to Merrill data. Compensation expense has been greater in the first half in each of the past three years.

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Ex-GM chief's pension cut to $8.5 million
July 14, 2009: Rick Wagoner, who was forced out of top job in March, agrees to an $12 million cut in payments he was due over the next five years.
Former General Motors CEO Rick Wagoner will receive $8.5 million over the next five years -- a reduction of about $12 million in his retirement package, according to a filing with the Securities and Exchange Commission Tuesday evening. The filing was made by Motors Liquidation Co. the company that holds the unwanted assets and liabilities the automaker left behind when General Motors emerged from bankruptcy Friday. The filing shows that Wagoner will get about $1.7 million a year for the next five years, and after that he will receive about $74,000 a year for the rest of his life.

The filing said that Wagoner agreed to the reduction in benefits. The deal takes effect Aug. 1. GM declined to comment on the filing. The company's previous filing on the subject in March estimated that the value of Wagoner's retirement package was about $20 million. Those estimates did not include Wagoner's stock holdings in the automaker. All GM shareholders had their investments wiped out by the bankruptcy filing.

Wagoner had just over 200,000 shares of GM's stock, and options for 4.3 million additional shares, according to recent filings. It is not known if he sold any of those shares after he departed the company and the value of those shares plunged in the two months before the bankruptcy filing. His annual pension payments were reduced 10% to $74,000. The cut is in line with the pension reductions imposed on other salaried GM retirees.

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