Goldman Lengthens Restricted Stock Schedule - 11 Dec 2008

Goldman Sachs is making some departing employees wait longer to
collect deferred equity compensation they have accrued.

The change to Goldman's retirement rules could encourage employees with
long tenure to leave before Jan. 1 in order to receive their restricted
stock under the old, more liberal rules.

The Financial Times reports: "Goldman will scrap its policy of allowing
employees whose combination of age and years of service exceeds 55 to
collect all of their restricted stock upon departure. Instead, the
programme - which is known around the firm as the 'rule of 55' - will
be replaced with a 'rule of 60'." The bank says the change will align
its restricted stock rules with those of rival institutions.

Most Goldman employees are allotted restricted stock every year as a
portion of their annual bonus. As in other institutions, the restricted
stock units vest over three years. They are forfeited if an employee
leaves "under a cloud" or joins a competitor, but other departees
receive the balance in their restricted stock accounts either
immediately (if they qualify under the "rule of 55") or in fragments
under the regular vesting schedule after they leave.

Goldman is currently in the process of shrinking its staff of 32,500 by
10 percent, as announced last month. There have been widespread reports
(which the company denies) that the bank is cutting a larger percentage
of its workforce.

The FT also reports that Citigroup last week eliminated extra severance
it had been awarding employees who depart after 10 years or more of
service. The change affects Citi workers who leave after Jan. 15, 2009.