Goldman Sachs (GS) Chairman and Chief Executive Officer Lloyd C. Blankfein on Tuesday called for industry reforms over how executives are compensated at financial institutions, saying compensation should discourage excessive risk-taking that may put the company and the markets at risk.
"We should apply basic standards to how we compensate people in our industry," Blankfein told an audience in prepared remarks at the Council of Institutional Investors' annual spring conference.
"Compensation should reflect an individual's ability to identify and create value, including his or her contribution to the client franchise, enhancing the firm's reputation and contributing to the better functioning and efficiency of markets. Equally important, compensation should take into account strict adherence to a firm's management and controls, especially with respect to a person's judgment and exercising that judgment in terms of risk in all of its forms."
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