Lloyd Blankfein, Goldman Sachs' chief executive called for an overhaul of bankers' pay yesterday. Mr Blankfein told fund managers in Washington that some industry decisions on pay looked "self-serving and greedy" and called for future changes.
Mr. Blankfein (2007 bonus: $70m, 2008 bonus: nil) said that senior executives should be paid mostly in deferred stock. Bonuses should be clawed back from underperforming bankers, the Goldman (share price fall in 2008: 58.4%) executive (let's say it again to hammer home the point, 2008 bonus:nil) added, without a hint of irony.
The Financial Crimes suggests that the board of Goldman Sachs might like to consider a different business model. Many firms in the past have operated very successfully on the basis of a partnership. This means that the risks in the business are borne wholly and exclusively by the partners who are executives in the business. It focuses the mind wonderfully.