Goldman Sachs Faces the Music: Five Major Shareholder Resolutions From Religious, Socially Responsible Investors Reflect Main Street Values Amidst Concerns About Wall Street Abuses

Anticipating Goldman SEC Fraud Probe, Faith-based Investors Raised Concerns Months Ago About Company Practices By Filing Resolutions on Derivatives, Pay Disparity, and Other Issues

NEW YORK, May 5 /PRNewswire-USNewswire/ -- When the management of Goldman Sachs meets Friday (May 7th) with its shareholders, it will face five major proxy resolutions filed by a delegation of over 12 members of the Interfaith Center for Corporate Responsibility (ICCR).  The broad range of concerns reflected in these resolutions from religious and other socially responsible institutional shareholders will send a stark message to Wall Street regarding abuses that are very far removed from "Main Street values."

The five key resolutions and their filers are:  

1)  Collateral in derivatives trading – Cathy Rowan for Maryknoll Sisters – A resolution that already received 30 percent support at Citigroup and 39 percent shareholder backing at Bank of America;  

2)  Pay disparity – Laura Shaffer for Nathan Cummings Foundation and Sr Judy Byron for Benedictine Sisters of Mt. Angel – A resolution requesting a review of internal pay disparity and the appropriateness of executive compensation levels;

3)  Separation of CEO and chair – A resolution requesting that the Chair of the Board of Directors be an independent member of the board.  Julie Tanner for Christian Brothers Investment Services and The Needmor Fund;

4) Political contributions – A resolution requesting that management provide a semi-annual report disclosing monetary and non-monetary political contributions and expenditures.  Adam Kanzer for Domini Social Investments.

5) Executive compensation (Withdrawn) – A resolution seeking the establishment of an independent panel to assist the board compensation committee in reviewing compensation and performance policies.  Jennifer Coulson for Northwest and Ethical Funds and Mark Regier for MMA Praxis Mutual Funds.

Two resolutions dealing with executive pay were withdrawn: One asked for the implementation of an annual advisory vote on executive pay as a platform for input from investors. As the company agreed to implement "say on pay" and put a resolution in the proxy, the resolution was pulled.  A second resolution asked for independent input on executive compensation policies and practices and, as management took steps to address the issue, the resolution was withdrawn.

Laura Berry, executive director, ICCR, said: "The proposals brought forward are part of a long standing conversation between ICCR members and Goldman executives; a conversation that goes back to their earliest days as a public company, seeking better transparency, good governance and sound risk management practices.  We are reminded yet again that hubris is a terrible thing, destroying value with catastrophic consequences for real people.  Any time powerful bankers lose sight of their roles in ensuring that trust undergirds the market place, they put us all at risk."

Cathy Rowan, consultant, Maryknoll Sisters, said: "Shareholders have a responsibility to hold management accountable for their actions.  Management has the responsibility to be transparent in regards to its policies and practices.  Greater transparency and disclosure in the over-the-counter derivatives markets on the part of Goldman Sachs is necessary to restore confidence and trust in our financial system."

"We believe that much of Goldman's recent trouble and the precipitous drop in its share price can be traced to a pervasive culture of greed fueled by enormous bonuses," said Laura Schaffer, director of shareholder activities, Nathan Cummings Foundation and Sr. Judy Byron, representative of the Benedictine Sisters of Mt. Angel.  "When shareholders asked the company to report on the appropriateness of its compensation levels, Goldman refused.  And while Main Street struggles to recover, Goldman executives have ignored the impact of their actions on both the American economy and the company's long-term share price, and continue to line their pockets with taxpayers' and shareholders' money."

Julie Tanner, Christian Brothers Investment Services, Assistant Director of Socially Responsible Investing, said: "While separating the positions of Chair and CEO is not a guarantee against future scandals, it does provide another layer of checks and balances and could improve the board's ability to oversee the activities of the company. Goldman should follow the lead of Citigroup, Bank of America and Morgan Stanley - all have separated the positions in the past three years. Goldman must create a new board leadership structure that includes an independent, non-executive Chair in order to help to restore public and market trust."

Adam Kanzer, general counsel & director of shareholder activism, Domini Social Investments, said: "Taken separately and in years past, shareholder activism at financial institutions has been taken for granted by Wall Street and regulators.  But to the religious investors who have worked on these issues for years and even decades, this year's votes at the Goldman Sachs board meeting encapsulate and may even help define the sense of betrayal emanating from every corner of the United States.  ICCR members feel strongly that their combined shareholder efforts this proxy season, particularly with respect to Goldman Sachs, promotes a shared public interest which stands in stark contrast to Goldman's alleged illegal actions."    

For the full text of the five resolutions, go to www.iccr.org.

ABOUT ICCR

For nearly 40 years the Interfaith Center on Corporate Responsibility (ICCR) has been a leader of the corporate social responsibility movement. ICCR's membership is an association of 300 faith-based institutional investors, including national denominations, religious communities, pension funds, foundations, hospital corporations, economic development funds, asset management companies, colleges, and unions. Each year ICCR-member religious institutional investors sponsor over 200 shareholder resolutions on major social and environmental issues.  For more information, visit http://www.iccr.org.

SOURCE Interfaith Center on Corporate Responsibility, NYC