Hub nuns join call to review firm’s pay

Investors query Goldman Sachs on compensation

By Lisa Wangsness
Globe Staff / April 7, 2011

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Two orders of Boston-area nuns are among a small group of investors taking Goldman Sachs to task on executive compensation.

The Sisters of St. Joseph of Boston and the Boston province of the Sisters of Notre Dame de Namur are two of four orders nationally that have signed onto a shareholder proposal asking the investment banking and securities titan to review the salaries of top executives and consider whether they are excessive and should be modified.

Sister Joanne Gallagher of the Sisters of St. Joseph said the filing comports with the order’s policy of promoting “justice, peace, and systemic change’’ in its investment activities.

The 2008 financial crisis provoked considerable public outrage about the compensation of top Wall Street executives and raised questions about their companies’ roles in creating the financial conditions that led to the meltdown. Last year, Goldman’s top five executives received compensation worth a total of almost $70 million.

The proposal, which will be considered at Goldman’s annual shareholders’ meeting on May 6, also asks the company to consider how layoffs and salary levels of low-wage workers affect the salaries of executives and how fluctuations in revenue affect the compensation pool, top-paid workers, and shareholders.

Shareholders overwhelmingly rejected a similar proposal last year.

Goldman opposes the filing. In its proxy statement, the company said shareholders “already have access to the information necessary to understand and assess the compensation decisions made with respect to our senior executives.’’ It added that generating the reports the filers seek would be a distraction to the firm’s compensation board.

Two other orders of Catholic nuns and Daniel Altschuler, an independent investor who is a fellow at Amherst College, have also joined the proposal. The effort was led by the Nathan Cummings Foundation, a New York-based nonprofit with a $400 million endowment that funds arts, culture, environmentalism, Jewish life, and other programs and uses its position as an institutional investor to encourage responsible corporate behavior.

All are associated with the Interfaith Center on Corporate Responsibility, whose 300 or so members use their status as investors to promote environmental responsibility, social justice, and sound corporate governance, including ending what it deems excessive executive pay.

Shareholder pressure can be effective. Goldman was among 100 or so companies asked by pension funds, trade unions, investment managers, and faith-based investors to give shareholders an opportunity to vote on the compensation of top executives. Goldman ultimately agreed; later, the so-called “say on pay’’ provision became part of the financial overhaul package passed by Congress.

Timothy Smith, senior vice president of Walden Asset Management, oversees the investment portfolios of the Sisters of St. Joseph and Notre Dame de Namur, as well as Altschuler. He said both orders own fewer than 100 shares of Goldman stock.

He said that even if the proposal does not pass, it has gotten Goldman’s attention. “The votes may not be large, but we believe this resolution and others are pushing the executive compensation committee to take those issues seriously,’’ he said.

Lisa Wangsness can be reached at