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Napa, CA - Harrington Investments, Inc. (HII), a Napa, California-based socially responsible investment advisory firm, recently filed a shareholder resolution at Goldman Sachs requesting the board of directors adopt a policy that top executives be required to retain 75% of the shares acquired through the company's compensation plan for at least 3 years from termination of employment.

John Harrington, President/CEO of HII said, "There is a complete disconnect between the salaries and bonuses paid to top executives and traders at Goldman and the economic reality of millions of working Americans. Lloyd Blankfein, Goldman's CEO, in 2007 took home $68.5 million in cash and stock and in 2009 has established a $20 billion compensation and benefit pool for employees, including "hot-shot" traders.These are the very people that have pushed U.S. economic security to the brink."　

Harrington believes the recently announced changes to Goldman Sachs compensation of top executives fail to address incentives for management to focus on the short-term at the expense of investors. In a recent announcement, the Goldman Sachs stock award plan has been revised for one year, so that all bonuses will be rewarded in the form of shares, potentially subject to clawbacks within five years.　

This so-called "policy change" is only for one year and only affects 30 management committee members. In addition to the 30 "fat cats," a major concern is the other 31,000 Goldman employees, consultants, and temporary workers -- especially traders that will average $800,000 per employee.

"The company's recent announcement is insufficient in addressing management's shortsightedness.　 Our proposal would at least require the top management to hold on to their stock positions after retirement, adding an incentive to create a more long-term outlook for the company and benefit shareholders. In the absence of a requirement to hold on to the shares after retirement, the executives will have continued incentives to manipulate short-term profits once their ability to sell bonus shares ripens," Harrington said.　

In contrast to the proposal by Harrington, the bonus clawback provisions recently adopted by Goldman Sachs set forth a legally contentious set of circumstances in which clawbacks might occur where the company can prove that an employee engaged in materially improper risk analysis or failed sufficiently to raise concerns about risks. This was added to prior policy, which required clawbacks of bonuses if employees engaged in conduct that was detrimental to the firm, including conduct resulting in a material restatement of the financial statement or material financial harm to the firm or one of its business units. "With all of these clawbacks, the company may face a steep burden of proof to recover bonuses. By contrast, our proposed holding period would provide a clear-cut incentive toward long term thinking for each of the executives to which it would apply," Harrington concluded.　

Harrington Investments, Inc. (HII) has been a leader in Socially Responsible Investing and shareholder advocacy for over 25 years. Its mission is to provide highly personalized asset management services that reflect a commitment to superior financial results, while investing in companies committed to positive environmental, ethical and social change. Goldman shares are not held by HII, but were purchased by Harrington personally to question management's excessive risk taking which endangers U.S. economic security.　

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