Goldman Sachs CEO Lloyd Blankfein is once again mixing it up with a shareholder representative of the Almighty.
At the investment bank's annual shareholders' meeting on Thursday morning, a New York nun asked Blankfein if he'd consider hiring her, according to Financial Times reporter Tracy Alloway. Blankfein's quick-witted response: "I don't think I could outbid your current employer."
The exchange was only the most recent noteworthy interaction between Blankfein and the brides of Christ. In early April 2011, four orders of nuns invested in the bank signed a proposal for shareholders to request a review of Goldman's compensation practices after learning the details of Blankfein's salary. The Sisters of Saint Joseph of Boston, the Sisters of Notre Dame de Namur, the Sisters of St Francis of Philadelphia and the Benedictine Sisters of Mt. Angel were responding to news that the firm's five top executives were paid a total of $69.5 million in 2010 during a lackluster year for the company's stock.
The nuns asked for "an evaluation of whether our senior executive compensation packages (including, but not limited to, options, benefits, perks, loans and retirement agreements) are 'excessive' and should be modified," as well as inquiries into how lower-ranking employee pay and fluctuating revenue impact remuneration at the top. "Whenever we're shareholders in a company," said Sister Nora Nash, "we believe in being active shareholders."
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With 10,000 lawsuits against them, you knew they'd be on the list somewhere. JPMorgan estimates it faces up to $3.315 billion in litigation after taxes, beyond what it has already paid out or reserved against. That adds up to 8.8% of the $37.612 billion JPMorgan is expected to earn in 2012-2013.
In 2011, JPMorgan's noninterest expense included $3.2 billion of litigation expense, mostly for mortgage-related matters, compared with $5.7 billion of litigation expense in 2010, according to Nomura's report
Citigroup estimates it is on the hook for up to $2.6 billion in litigation after taxes, beyond what it has already paid out or reserved against. That adds up to 9.9% of the $26.364 billion Citigroup is expected to earn in 2012-2013.
Citigroup faces a variety of regulatory inquiries and class action lawsuits related to its mortgage origination practices. The private lawsuits will not be included in a National Mortgage Settlement, reached last month with 49 state attorneys general and the federal government. Bank of America (BAC), JPMorgan, Wells Fargo (WFC) and Ally Financial, the former GMAC, were also part of the settlement.
Bank of America estimates it faces up to $2.34 billion in litigation expenses after taxes, beyond what it has already paid out or reserved against. That would equate to 10.9% of the $21.455 billion the bank is expected to earn in 2012-2013. The bank faces lawsuits related to mortgage originations and servicing, as well as for alleged failure to disclose its knowledge of ballooning losses at Merrill Lynch ahead of its eventual acquisition of that company.
The $2.34 billion figure, however applies only to "those matters where an estimate is possible," according to the bank's annual 10-K filing with the Securities and Exchange Commission.
Regions Financial estimates it faces up to $221 million in additional litigation costs after taxes, or 12.9% of estimated $1.707 billion in 2012-2013 earnings.
Regions is also on the hook for any litigation related to its Morgan Keegan brokerage unit, which it agreed to sell to Raymond James Financial (RJF) on Jan. 11.
Synovus faces just $39 million in potential litigation costs after taxes, above what it has written down or reserved against. However, that equates to 14.5% of the bank's estimated $270 million in 2012-2013 earnings.
As is the case with Bank of America, however, Synovus's estimates relate only to "those legal matters where [the company] is able to estimate a range of reasonably possible losses," according to its 10-K.
Goldman rejected the proposal, saying the preparation of such a report would be "a distraction" that "would not provide shareholders with any meaningful information," and claiming that investors already have all the information they need about executive pay.
In November 2009, Blankfein famously declared himself a simple banker "doing God's work." The comment, which Blankfein later characterized as a joke, elicited much criticism and indignation. This latest quip suggests that the CEO's sense of humor has improved somewhat; no word yet on whether the nun was joking.