BREAKING NEWS Blizzard warning blankets entire viewing area Full Story
SEVERE WX : Winter Storm Warning - Wind Chill Advisory - Blizzard Warning View Alerts
CLOSINGS: View Closings

Why Goldman Sachs gave early stock awards to 300 employees

In a race against looming changes to the tax code, Goldman Sachs handed out millions of dollars worth of stock awards...

Posted: Jan 1, 2018 11:06 AM
Updated: Jan 1, 2018 11:06 AM

In a race against looming changes to the tax code, Goldman Sachs handed out millions of dollars worth of stock awards to hundreds employees.

The move will save the firm an estimated $140 million on its tax bill next year, a source familiar with the matter told CNNMoney.

According to public filings posted Friday, 10 Goldman executives -- including CEO Lloyd Blankfein and much of the company's C-Suite -- were given stock awards worth a combined $94.8 million on Thursday. But the those stocks weren't supposed to be delivered until January.

The source said that about 300 other Goldman employees also received early delivery this week. The total amount of those awards were not known and a spokeswoman declined to comment on the value.

Goldman said in a public filing that it moved the awards into 2017 because of "changes in U.S. tax law."

Related: Tax overhaul costs Goldman Sachs $5 billion

The new law marked the most sweeping overhaul of the U.S. tax code in 30 years. It included a big cut to the corporate tax rate, lowering it to 21% from 35%.

But it made many other changes, and companies are scrambling to adapt. The law was signed by President Trump just before Christmas and most provisions go into effect on January 1.

One provision changes how much companies can deduct for the compensation they pay executives, said Jared Walczak, a senior policy analyst at the nonpartisan Tax Foundation.

Related: America's tax change is costing foreign companies billions

Under current law, companies can only deduct up to $1 million per executive, but performance-based pay is excluded from the cap. Starting January 1, that performance-based compensation will count toward the $1 million.

That will effectively remove the tax incentive for companies to tie pay to performance, while keeping base salaries under $1 million.

In a related move, Netflix also reacted to the new tax law by changing its executive compensation plan for 2018.

The company said in a public filing posted Thursday that it's going to start paying some of its top executives higher salaries, and tie less of their compensation to performance, citing the law change.

Article Comments

Mason City
Broken Clouds
wxIcon
Hi: 6° Lo: -4°
Feels Like: -25°
Albert Lea
Overcast
wxIcon
Hi: 3° Lo: -4°
Feels Like: -22°
Austin
Overcast
wxIcon
Hi: 7° Lo: -2°
Feels Like: -22°
Charles City
Overcast
wxIcon
Hi: 6° Lo: -4°
Feels Like: °
Rochester
Overcast
wxIcon
Hi: 7° Lo: -3°
Feels Like: -25°
Blizzard Warning
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Tracking Saturday's blizzard

Image

Chris and George at the top of the 10

Image

Snow plow drivers prep for snow

Image

Navigating Mayo Clinic Ambulances in the snow

Image

Snow and 18 Wheelers

Image

When to call 911

Image

Chris' PM Weather Forecast 1/17

Image

Tow truck drivers prepare for snow

Image

Weather impacts on public transportation

Image

First at 4 Snow Storm

Community Events