Posted by Cognito on Sun, Feb 21 2010

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PR News: Goldman Bonuses

Photo of Lloyd BlankfeinA little overdue now but a couple of weeks ago PR News asked me to contribute to its 'Advisor' column on the question of Goldman Sach's bonuses. The exact question was:As Goldman Sachs prepares to announce its final compensation pool and bonuses, how well are they reacting to the public sentiment, and what could they do differently?

My answer, published in last week's issue was:

Thanks to its niche client base, Goldman Sachs has traditionally managed to avoid proactive engagement with the wider world, a strategy that served it well until recently. But times have changed irrevocably and the public can now exert a much greater influence via heavy-handed regulators and even, as reported recently, through direct threats against the firm's employees. Clearly something needs to change. 

Goldman has had 18 months to roll out a holistic PR strategy but teaching an old dog new tricks has been difficult. The steps Goldman has taken recently have been the right ones: trumpeting the firm's philanthropic efforts, engaging in a new $500m small business initiative and converting a greater percentage of its cash bonuses to equity. Unfortunately, not having had an established platform of engagement in place, many of these knee-jerk moves are falling on deaf ears or being dismissed as gimmicks. Goldman is a cautionary tale on the value of building long rather than short-term relationships with the public.

If we are to avoid the kind of populist 50% bonus tax currently being levied in Europe, Goldman and other investment banks are going to need to fundamentally rethink their engagement strategy."

Banking Communications, Bonuses, Goldman,
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