In a move to pay back the government bailout money it received last year, Goldman Sachs said it plans to raise $5 billion by selling new common shares to investors. The investment bank also recorded $1.81 billion in earnings in the first quarter of 2009, boosting its financial confidence.
Once the company pays back the government debt, the investment bank will be free from the government clutches. And it will be free to make salary payouts as it wishes. Currently, there is a federally mandated cap on compensation.
Last year, there were 953 Goldman employees -- nearly one in 30 -- who took home more than $1 million in salary, Wall Street Journal reported quoting people familiar with the matter. The pay restrictions are tied to loans. Goldman had taken about $10 billion in government bailout money in last October.
If Goldman is permitted to repay its loan, it would be the first big bank to do so.
In fact, Goldman Sachs was adequately capitalised even when it received the government bailout money. On Sept. 23, 2008. the firm raised $5 billion from Warren Buffett's Berkshire Hathaway Inc. Goldman also raised another $5.75 billion in a common-stock offering.
For the period ended March 27, Goldman posted net income of $1.81 billion, or $3.39 a share, up from $1.51 billion, or $3.23 a share, a year earlier. Net revenue increased 13% to $9.43 billion.
This is a major rebound from the fourth quarter, when Goldman posted its first loss since going public in 1999.
"Given the difficult market conditions, we are pleased with this quarter's performance," Blankfein said in a statement.
Leave Your Comment