January 11, 2010
Goldman Sachs: Huge Bonuses May Come with a Charity Requirement
- The New York Times reports that Goldman Sachs is considering whether to increase the charity requirement it imposes on top executives who receive high salaries. Goldman's current program requires 400 partners to contribute an unspecified amount to charity - either through Goldman Sachs Gives, a fund that manages donor-directed funds for Goldman employees, or to other charities. Goldman has not disclosed the amount the partners must contribute and has not said whether changes would mean creating a new program or simply expanding the current program. As described in the article, the primary concern about whether to expand the charity requirement is whether doing so will blunt public criticism when huge bonuses are announced.
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An interesting question is whether Goldman executives, having been compelled to donate, will still get a charitable contributions deduction. Cf. Rev. Rul. 79-148, 1979-1 C.B. 93 (amount paid to charity as condition to receiving probation in lieu of imprisonment is not deductible). But I could distinguish the ruling (which relied on I.R.C. section 162(f)) and I'd bet that Goldman has enough lawyers around to make it likely that the program is constructed properly to permit the deduction.
Posted by: Harvey Dale | Jan 12, 2010 4:55:03 AM