Napa – A shareholder resolution, filed by Harrington Investments, Inc. (HII), a Napa, California-based socially responsible investment advisory firm, aims to put a stop to runaway executive compensation and short-term profiteering at Goldman Sachs. The resolution received the support of 25% of shareholders at today’s May 7th annual shareholder meeting, even though management urged a “no” vote. RiskMetrics Group supported the HII resolution.

The proposal, presented by Stephen Viederman of the Needmor Foundation on behalf of HII, would require all Goldman executives to hold 75 percent of stocks and options they receive as compensation for at least three years after termination of employment.

“Given that over 11% of Goldman’s stock is owned by insiders, 72% is owned by institutional investors and most individual investors don’t vote their stock by proxy, the large number of votes for the proposal indicates a vote of no confidence by ‘main street’ shareholders incensed by compensation practices at the firm,” said John Harrington, CEO of Harrington Investments.

“Requiring executives to hold on to shares through early retirement would help align executive and shareholder interests and encourage a long term focus on investment policies,” added Harrington.

Goldman Sachs CEO Lloyd Blankfein

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In a 2009 speech to the Council of Institutional Investors, Chairman and CEO Lloyd Blankfein stated that “senior executive officers should be required to retain the equity they receive until they retire.” Ironically, in their proxy statement Goldman urge a “no” vote on Harrington’s proposal, arguing it would tie the compensation committee’s hands and limit their flexibility.

Such hypocrisy, however, appears to be standard fair for management. No wonder, as Blankfein himself stated at the shareholder meeting, there is a disconnect between how the company views itself and how outsiders see Goldman Sachs.

“There is a complete disconnect between the salaries and bonuses paid to top executives and traders at Goldman and the economic reality of millions of working Americans,” said Harrington. “In 2007, Lloyd Blankfein took home $68.5 million in cash and stock and in 2009 established a $16 billion compensation and benefit pool for employees, including “hot-shot” traders. These are the very people that have pushed U.S. economic security to the brink.”

Harrington Investments, Inc. (HII) has been a leader in Socially Responsible Investing and shareholder advocacy for over 25 years. Its mission is to provide highly personalized asset management services that reflect a commitment to superior financial results, while investing in companies committed to positive environmental, ethical and social change. Goldman shares are not held by HII, but were purchased by Harrington personally to question management’s excessive risk taking which endangers U.S. economic security.

Risk Metrics Group (RISK) a publicly traded firm specializing in risk management, corporate governance, independent research and analytics, recommended a “yes” vote on the Harrington resolution. RISK provides advice to institutional investors on shareholder resolutions. RISK provides advice to 72 of the 100 largest investment managers, and 35 of the 50 largest hedge funds in the world.