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Goldman Sachs wants to repay its TARP money … are we okay with that?
By Lauren | April 14, 2009
The Wall Street Journal reported today that Goldman Sachs Group Inc. has announced positive earnings ahead of schedule, hoping that its good news will provide a platform for a major stock sale. According to the Journal, Goldman hopes to raise $5 billion in stock to pay back the $10 billion in Troubled Asset Relief Program, or TARP, money it received from the federal government last year. It seems that Goldman executives, many of whom were accustomed to receiving more than $1 million in compensation each year, are chafing under the salary caps that come with federal bailout money. If they pay back their TARP funds, the good times can presumably start rolling again.
That’s a good thing, right? Well, maybe…
On one hand, it’s great to see a major investment firm producing positive results and striving to do even better. And it’s impossible not to admire the “can-do” spirit of Goldman’s management. At a time when so many companies are struggling, any good news is welcome.
Still, it would have been comforting if Goldman’s management had announced new ethics rules, or at least made a public commitment to adhere more closely to existing ones, at the same time it announced its upcoming offering. It would also be nice if Goldman planned to raise the entire $10 billion it borrowed. Do Goldman executives think they can escape TARP salary caps by returning only half the taxpayers’ money?
There’s nothing wrong with wanting to make a living, but the unrestricted lust for money appears to have been a lot of what upended the financial markets in the first place. Personally, I’d be happier if Goldman’s executives were motivated by something other than the desire to return to their former, remarkably lavish personal lifestyles. As it is, to paraphrase Yogi Berra, I’m afraid we may soon be back to deja vu all over again.
Topics: Business Ethics, Corporate Governance, corporate responsibility, ethics |