Goldman Sachs GroupInc. in a definitive proxy statement filed April 8 disclosed that certainshareholders have separately proposed to prohibit vesting of equity awards uponentering government service and to require an independent board chairman.
The shareholder proposals are required to be voted upon at thecompany's May 20 annual meeting only if properly presented at the meeting.
The AFL-CIO Reserve Fund, beneficial owner of 231 common sharesof the company, proposed that the board adopt a policy prohibiting the vesting ofequity-based awards for senior executives due to a voluntary resignation to entergovernment service. The proponent noted that the company's stock incentive plancontains a conflicted employment clause that permits the accelerated vesting ofequity awards or an equivalent cash payment to executives who voluntarily resignto pursue a government service career. AFL-CIO Reserve Fund said it believes thatcompensation plans should align the interests of senior executives with the long-terminterests of the company and that it opposes compensation plans that provide windfallsto executives that are unrelated to their performance.
The board unanimously recommended a vote against the proposal,saying none of the company's senior executives holds any equity-based awards thevesting of which would be triggered by voluntary resignation to enter into governmentservice.
Additionally, James McRitchie and Myra Young, beneficial ownersof 40 common shares, have proposed that the board adopt as policy, and amend governingdocuments as necessary, to require the chair of the board, whenever possible, tobe an independent member of the board. The proponents noted that Lloyd Blankfeinhas been chairman and CEO since 2006 and said that a board is less likely to providerigorous independent oversight of management if the chairman is also the CEO.
The Goldman Sachs Group board unanimously recommended a voteagainst the proposal, saying a board leadership review by its governance committee,comprising all of its independent directors, determined that continuing to combinethe roles of chairman and CEO is the most effective leadership structure for thecompany.
The record date for the determination of the shareholders entitledto vote at the annual meeting was the close of business March 21.