Goldman Shareholders: Please Vote with the Nuns

Who would you trust when it comes to deciding what "God's work" involves: senior bankers at Goldman Sachs or four orders of Catholic nuns?

Me, too.

The nuns (Sisters of Saint Joseph of Boston, Sisters of Notre Dame de Namur, the Sisters of Saint Francis of Philadelphia, and the Benedictine Sisters of Mount Angel) have prepared a shareholder proposal to be presented at Goldman Sachs' annual general meeting next month that asks the bank's compensation committee to review whether "senior executive compensation packages (including, but not limited to, options, benefits, perks, loans and retirement agreements) are 'excessive' and should be modified."

The five most senior executives at Goldman received $69.5 million in pay last year, despite a 38% drop in annual earnings and an essentially unchanged share price.

The nuns also ask the compensation committee to explore "how sizeable layoffs and the level of pay of our lowest paid workers impact senior executive pay." (click here for Alex Hawkes' article in The Guardian; here for Katya Wachtel's Business Insider piece)

The nuns, together with the Nathan Cummings Foundation, are Goldman shareholders. While individual nuns take vows of poverty, orders of sisters may have investable funds. The nuns, of course, have a fiduciary responsibility to see that those funds are well- and wisely-invested. They also have a moral obligation to speak out when they believe funds are being unwisely spent. And they understand that compensation is not just a financial issue, but a moral one.

Goldman's chief executive officer, Lloyd Blankfein, famously said in 2009 that the bank was doing "God's work" (click here for my post on that comment and others like it); the nuns seem to disagree.

Goldman, in the SEC filing that revealed the nuns' proposal, urged its shareholders to vote against the request, as "the preparation of the requested report would be a distraction to our compensation committee and our board, [and] would entail an unjustified cost to our firm..."

Apparently, they're not concerned that their pay packages might be an "unjustified cost".