Proxy advisor Institutional Shareholder Services on Friday recommended investors vote against a stock plan for employees at Goldman Sachs Group Inc, concerned about its costs along with the bank’s heavy use of stock-based compensation.
In a report to clients sent by an ISS spokesman, the leading proxy advisor wrote in which the “the cost of the company’s equity plan along with three-year burn rate are excessive.”
“Burn rate” measures the proportion of outstanding stock used to pay everyone via Goldman CEO Lloyd Blankfein to rank-along with-file workers, along with roughly tracks how fast investors are being diluted.
Goldman previously acknowledged its burn rate has been higher than rivals as the idea overhauls its strategy. Based on shareholder feedback, the completely new York bank had proposed to continue its equity plan for three years yet request no completely new shares for issuance under the plan.
ISS also said the idea could offer just “cautionary” support in an advisory vote for the pay of top executives including Blankfein, who received about $22 million in 2017.
While investors will welcome a shift to more equity awards tied to performance, ISS wrote, Goldman’s compensation committee has much discretion in setting pay along with goals for executives may not be so rigorous.
Goldman Sachs representatives did not immediately comment.