Brendan Mcdermid / REUTERS
Traders work on the floor of the New York Stock Exchange near the Goldman Sachs post.
Question: What’s the cost to a company of one disgruntled former employee?
Answer: About $2 billion if it’s Goldman Sachs.
That’s how much of the bank’s market value was wiped out after one of its directors, Greg Smith, resigned from the company and penned an op-ed piece in The New York Times attacking the firm’s culture and treatment of clients.
The bank’s shares fell 3.3 percent in trading Wednesday as London-based Smith’s article set Wall Street and the media ablaze with discussion about the behavior of big banks bailed out by taxpayers after the financial crisis. The share price decline meant Goldman lost some $2 billion in market value. Its market capitalization is currently just short of $65 billion.
Still, Smith may not be out of pocket after his scathing condemnation of the bank, which appeared at the tail-end of Wall Street’s bonus season.
Annual incentive payouts for top bank employees often reach into the millions, although this year Wall Street bonuses are expected to be down sharply from a year ago, according to Johnson Associates, a New York-based compensation consulting firm.
Year-end incentives declined sharply in 2008 during the economic crisis, but have rebounded over the past two years, Johnson Associates said.
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