Goldman Sachs Non-Cash Bonus?

So today Goldman Sachs says their top people will get a bunch of shares that they will not be able to sell for 5 years rather than cash.

Insiders know that Goldman has had an ROE of some 20-40% over the last 30 years -- so that's is not such a bad investment. They also know that they can Goldman folks can get cash from banks very easily against future bonuses (and stock).

Outsiders first think -- hey, that should get them thinking long term. Then they say -- those Goldman guys must be really well off to be able to forego their cash bonuses. And how about taxes on those stock grants -- capital gains rate when sold? Perhaps the British and French special tax on bonuses is not so outrageous?

Seems like Mr. B should stick to making money -- and get better help on the PR side of things.

Then there is Mr. P -- trying to pay off $20B to the government while taxpayers are guaranteeing some $400B in assets -- so that he can freely compensate his people.

Special Bankruptcy for Too Big to Fail

In the past, I have supported regulations, additional fees, etc. to discourage institutions from becoming and remaining "too big to fail."

The concept of living will, etc. are intriguing -- but seems rather impractical.

What has been impressive is the speed in which the government was able to put Chrysler and GM through bankruptcy.

The "easy" solution to "too big to fail" seems to be [legislated] bankruptcy for large financial institutions (and other conglomerates). This should definitely mandate speedy process. The good bank, bad bank is probably worth including as well.

If the government needs to fund the good bank temporarily -- we need to make sure tax payers get preferred returns to old equity AND DEBT holders.