Goldman Sachs Group Inc, which was criticized for allocating US$16.7 billion to pay employees for the first nine months of the year after receiving money from a government bailout program, was sued by a pension fund, according to a statement by the fund.
The Security Police and Fire Professionals of America Retirement Fund said that Goldman Sachs’ board breached its fiduciary duties by failing to administer bonus plans in the best interests of the company and its shareholders.
The lawsuit, which could not be immediately confirmed with court officials, was filed on Monday in state court in New York, the statement said.
The pension fund claims the total employee payouts for this year are estimated to be more than US$22 billion including bonuses. The payments are based on “a US$1 trillion investment made by the American taxpayers” to stabilize the financial industry, not on the efforts of Goldman Sachs’ employees, the fund said in the statement.
Lucas van Praag, a Goldman Sachs spokesman, said, “We think the suit is entirely without merit.”
The US$16.7 billion payout would be 47 percent of revenue. The firm has traditionally paid from between 40 percent and 50 percent of the firm’s annual revenue to employees.
The lawsuit argues that such a calculation doesn’t take into account other factors that contribute to the firm’s revenue, including financial support from the US government last year.
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