NEW YORK – When Goldman Sachs Group Inc. executives and shareholders gather Friday morning for the company’s annual meeting, the room might look a little like a house of worship.

A coalition of religious groups headed by a nun, a priest and the CEO of a Jewish organization will be there to press Goldman Sachs Group Inc. to evaluate whether it’s paying executives too much. Goldman CEO Lloyd Blankfein will have no choice but to listen. The group has won a coveted spot on the annual meeting agenda.

The religious contingent also wants the investment bank to evaluate the pay discrepancy between high-paid workers and those at the bottom. And they’re asking the company to explain something many shareholders want to know: why compensation for Goldman’s top five executives rose to $69.6 million in 2010 even as profits and revenues have declined.

The Nathan Cummings Foundation, which says it is rooted in Jewish tradition, along with the Sisters of Saint Joseph of Boston, the Sisters of Notre Dame de Namur, the Sisters of Saint Francis of Philadelphia and the Benedictine Sisters of Mount Angel, have introduced a shareholder resolution that asks the investment bank to evaluate whether its compensation packages for senior executives are excessive and should be modified. The resolution calls on Goldman to publicly report its findings by October 1.

Sister Nora Nash of the Sisters of Saint Francis says the group’s mission is primarily about getting better returns. Her order of nuns and the other religious groups are long-term shareholders of Goldman; their retirement savings are at stake when outsized pay packages limit dividends or growth. (The groups declined to say how many shares of Goldman they owned, but most are held through investments in various funds.)

“When we see CEOs earning over 300 times more than the typical worker, it raises serious questions for shareholders on whether they are really (that) valuable,” says Sister Nash.

Advertisement

As evidence, she and other members of the religious coalition point to a new study from the Council of Institutional Shareholders and a review by Kenneth Feinberg, who served as the White House’s special master on Wall Street pay. The studies show financial services companies have “overpaid” executives and that high compensation damages shareholders because it leaves less money for other investments and payments.

Sister Nash will make a presentation at the annual meeting to try to win shareholder support for the resolution. Shareholders can vote on the measure Friday. Company officials tried to have the proposal removed from the agenda but the Securities and Exchange Commission – which approves such exclusions- rebuffed the effort.

It might be hard to ignore nuns and priests at a shareholder meeting of an investment bank, but what matters to shareholders is the substance of the proposal, experts say.

“If the resolution resonates with other investors, it will pass,” said Charles Elson, director of the Weinberg Center for corporate governance at the University of Delaware.

For the last several years, Goldman has been the target of public outrage over its outsize compensation for top executives.

 


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.