NEW YORK — When Goldman Sachs Group executives and shareholders gather this morning for the company's annual meeting, the room might look a little like a house of worship.
A coalition of religious groups headed by a nun, a priest and the chief executive of a Jewish organization will be there to press Goldman to evaluate whether it's paying executives too much. Goldman CEO Lloyd Blankfein will have no choice but to listen. The group has won a coveted spot on the annual meeting agenda.
The religious contingent also wants the investment bank to evaluate the pay discrepancy between high-paid workers and those at the bottom. And they're asking the company to explain something many shareholders want to know: why compensation for Goldman's top five executives rose to $69.6 million in 2010, even as profits and revenue have declined.
The Nathan Cummings Foundation, which says it is rooted in Jewish tradition, along with the Sisters of Saint Joseph of Boston, the Sisters of Notre Dame de Namur, the Sisters of Saint Francis of Philadelphia and the Benedictine Sisters of Mount Angel, have introduced a shareholder resolution that asks the investment bank to evaluate whether its compensation packages for senior executives are excessive and should be modified.
Sister Nora Nash of the Sisters of Saint Francis says the group's mission is primarily about getting better returns. Her order of nuns and the other religious groups are long-term shareholders of Goldman; their retirement savings are at stake when outsized pay packages limit dividends or growth.
"When we see CEOs earning over 300 times more than the typical worker, it raises serious questions for shareholders on whether they are really (that) valuable," she said.
As evidence, she and other members of the religious coalition point to a new study from the Council of Institutional Shareholders and a review by Kenneth Feinberg, who served as the White House's special master on Wall Street pay. The studies show financial services companies have "overpaid" executives and that high compensation damages shareholders because it leaves less money for other investments and dividends.
"Everybody deserves to be rewarded for their work," said Father Seamus Finn of the Missionary Oblates of Mary Immaculate, who plans to attend the meeting. "But our culture has created the star corporate CEO whose work doesn't deliver the kind of value warranted by that status."
The group says the significant compensation increases given to Goldman execs weren't merited. The firm's profits and revenue declined dramatically. However, Blankfein's total 2010 compensation, which includes salary and bonus, rose to $14.1 million after falling to just over $1 million in 2009.