Here’s a good example of reporting by old media getting amplified and expanded upon by new media.
The Wall Street Journal has a good page-one story today on how banks are finagling the compensation issue by providing other perks to bankers.
Bank of America Corp. and Citigroup Inc. are doling out shares that employees can sell within months—much sooner than normally allowed. Other giant banks, including Goldman Sachs Group Inc. and Royal Bank of Scotland Group PLC, let certain employees borrow money to relieve personal cash crunches. And some U.K. banks have considered raising base, or cash salaries—funds that won’t be subject to the country’s new 50% tax on bonuses.
The Journal zeroes in on loans to employees, some of which don’t have to be paid back. This is excellent context here:
A rise in favorable employee loans could fuel new resentment over the pay culture at financial companies. Many banks remain tight about lending to consumers and small businesses. Loan balances at U.S. banks shrank by 2.8% in last year’s third quarter, the largest decline in at least 25 years, according to the Federal Deposit Insurance Corp.
Meanwhile, Gawker’s John Cook builds on the Journal‘s story in a post late this afternoon by examining New York mortgage records for Goldman Sachs:
We found 17 instances of Goldman lending to individual residential property owners in New York City in the last decade, and all of them were after mid-2008, when the meltdown got going. About half of them involved Goldman employees.
Who cares? Well, it’s always good to be snooping around. Look at this:
But we can get an idea from the $4 million mortgage Goldman lent to one VIP in April 2008: Rodney O. Martin, the COO of AIG’s (!) life insurance unit. Martin and his wife purchased a $4 million apartment in 15 Central Park West just as the bottom was falling out, and none other than their new neighbor Lloyd Blankfein, who also lives in that building, supplied them with a 30-year mortgage, which was interest-only for the first ten years.
The interest rate was 4.8%, nearly two points lower than the prevailing rates at the time. And as evidence of how important Martin was to Goldman’s business, the mortgage was executed by William Yarbenet, the firm’s chief credit officer, himself.
It’s really too bad that it wasn’t Joseph Cassano. That would have been a big story indeed. Still, what other business was Martin doing with Goldman Sachs (an Audit funder)?
I like it. Good for Gawker and the Journal.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.