Goldman Sachs plans tighter bonus rules

Goldman Sachs has adopted a new long-term bonus plan that lets the board award cash and stock on top of existing compensation, but lets the firm take back money if the employee takes too much risk, the investment banker said in filing with securities regulators.

The plan applies to unspecified key employees starting this year. It gives Goldman the ability to take back bonuses from employees who violate company rules.

The plan is a tool the compensation committee may use to further align incentive compensation with long-term performance, Goldman spokesman Michael DuVally said.

Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008.

The bank was among those that created mortgage-backed investments that turned out to be toxic. Goldman later bet against some of those investments and made billions when the housing market collapsed.

Goldman took $10 billion from the taxpayer bailout that Congress authorized to unclog frozen credit markets. It then awarded 953 executives bonuses worth $1 million or more for their work in 2008.

Goldman Sachs earned $5.97 billion during the first nine months of the year and put aside $13.1 billion in pay for its 35,400 employees.

Goldman employees are expected to find out in the third week of January what their bonuses will be and will most likely receive them in early February.