Goldman’s Cohn Unlocks More Than $284 Million by Joining Trump

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https://www.bloomberg.com/news/articles/2017-01-24/goldman-sachs-paid-ex-president-gary-cohn-20-million-for-2016

>Gary Cohn’s jump from Goldman Sachs Group Inc. to Donald Trump’s administration is helping him unlock more than $284 million in pent up bonuses, stock holdings and other investments through the Wall Street bank.

>To help Cohn avoid conflicts of interest as Trump’s top economic adviser, the bank is letting its former president immediately collect about $65 million in cash and stock tied to its future performance. That’s on top of roughly $220 million of Goldman equity he already held or was awaiting, as well as stakes in company-run investment funds, according to regulatory filings Tuesday. He must liquidate the holdings to take his new post.

>Cohn is selling his Goldman stock as it trades near a record high on speculation Trump’s policies will be a boon for the bank. While Cohn could miss out on such brighter days, diversifying holdings will lower his risk for major losses if the firm instead stumbles in years ahead. That turned out to be an advantage for former Chief Executive Officer Henry Paulson, who sold off his stock in the bank to become U.S. Treasury Secretary in 2006 just before the global financial crisis.

>“Fortuitously, all of this divestiture happens as stock in Goldman Sachs hovers near a multi-year high,” said Frank Glassner, CEO of Veritas Executive Compensation Consultants. But “it’s not like he’s jumping out of an airplane that’s headed down.” And being forced to quickly sell stakes in Goldman’s buyout and hedge funds probably means Cohn is “stepping out of that stuff at a discount,” he said.

>To be sure, Cohn already was free to sell some of his stock holdings before his career change. But a large disposal would’ve been awkward, because investors may view it as a lack of confidence in the company’s future, Glassner said.
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