Goldman Sachs Group Inc. shareholders rebuffed the board of directors for the first time since the firm went public in 1999, voting to back a proposal that would let a simple majority enact changes at the company.
“It is really an arm-wrestle between the board and shareholders in terms of who will have a say,” said Eleanor Bloxham, president of the Corporate Governance Alliance in Columbus, Ohio. The vote is “a major signal from shareholders in terms of their involvement,” she said.
Goldman Sachs requires a vote of 80 per cent of outstanding shares to take action such as removing a director or amending by-laws. It had argued that the rule protected minority investors from “coercive” tactics, including a potential change in control of the firm.
The company’s annual meeting took place in the backdrop of 61 per cent drop in its stock price last year and the company taking $10-billion of US bailout funds.
Goldman Sachs was the most-profitable and highest-paying securities firm before converting to a bank last year amid the worst financial crisis since the Great Depression.