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$53.4m bonus sets Wall Street record

NEW YORK (AP) — John Mack’s record for the biggest bonus on Wall Street did not last even a week. It was smashed by the $53.4 million that Goldman Sachs gave its chief executive, Lloyd Blankfein.The bonanza for Blankfein included a cash bonus of $27.3 million (euro20.7 million), with the rest paid in stock and options. He took the helm of the investment bank in June after President George W. Bush nominated Henry Paulson to be Treasury secretary.

The record payday, disclosed by Goldman Sachs Group Inc. in a filing with the Securities and Exchange Commission yesterday, breaks the one set just last Thursday when Morgan Stanley disclosed that it paid CEO Mack $40 million in stock and options. Mack, who is 62, rejoined Morgan Stanley 18 months ago to turn around the company after the ouster of Philip Purcell. Mack’s short-lived record bested one set in 2005 by Goldman’s Paulson, who was given $38.3 million.

Other than Blankfein, 11 other senior Goldman executives as a group were granted slightly more than $150 million in shares and stock options. The highest paid among those were Gary Cohn and Jon Winkelried, who both hold the titles of president and chief operating officer. They each received $25.6 million in shares and options in 2006.

Any cash bonuses for the other executives were not mentioned in the filings.

The bonuses come after Goldman reported last week that it had earned the highest yearly profit in the history of Wall Street. Net profit rose 70 percent to $9.4 billion on revenue of $37.67 billion. Goldman and other firms have benefited from a surging market for takeovers and a strong stock market.

Goldman said last week it had set aside a total of $16.5 billion this year for salaries, bonuses and benefits. On average, this would translate to $622,000 per employee.

The bonuses come in a year in which Goldman shareholders have benefited from a rise of about 58 percent in the company’s share price, the strongest returns of any Wall Street investment house.