Weekend Economists Make War on Charlie Wilson August 22-24, 2014

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48. Goldman Sachs Partners’ Ownership at Lowest Since 2010

http://www.bloomberg.com/news/2014-08-22/goldman-sachs-partners-ownership-at-lowest-since-2010.html

Goldman Sachs Group Inc. (GS) partners cut their ownership of the firm to the lowest level since 2010 by exercising options dating from the financial crisis, as the total reaped this year from such awards nears $400 million.

The partners owned 8.52 percent of the New York-based company’s shares on Aug. 13, down from 9.45 percent in May, according to a regulatory filing today. Individuals exercised options from July 16 to Aug. 12 that yielded $107 million after covering the cost of the options and some tax withholding, the filing shows.

The conversions bring the total netted by partners this year from the 2008 options to about $390 million, as the employees benefited from a doubling in the firm’s stock price since the financial crisis. The options vested over three years ended in January 2012, and shares gained through such awards couldn’t be sold until this year.

In December 2008, Goldman Sachs granted 36 million options in an effort to give top performers an incentive to stay after the bank reduced compensation expense by almost half during the credit crunch. More than 34 million of those options were still outstanding at the end of 2013. The partners have exercised almost 9 million of the options this year, according to filings.