Goldman ties its bonuses to firm's long-term profits

WASHINGTON — Goldman Sachs Group Inc. will tie the bonuses of top executives more closely to the company's financial performance.

The investment bank, based in New York, said in a regulatory filing this week that bonuses will be linked to financial benchmarks that might include return on equity, earnings, or the price of Goldman's stock or other securities issued by the company.

The plan applies to unspecified "key employees" starting this year. It gives Goldman the ability to take back bonuses from employees who violate company rules.

Goldman says the plan aims to "align compensation with long-term performance in a manner that does not encourage imprudent risk-taking."

The financial overhaul law passed this summer allows regulators to block pay plans that encourage excessive risk.

Such pay practices contributed to the financial crisis by pushing traders to make deals that yielded quick profits but later upended the market.

Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008.

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