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  • 2011-10-26 (xsd:date)
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  • Occupy Providence sign says Goldman Sachs CEO earns in an hour what minimum wage worker earns in a year (en)
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  • In downtown Providence, as in other cities around the globe, protesters inspired by the Occupy Wall Street movement are trying to raise awareness about economic inequalities. On a recent visit to Occupy Providence’s encampment at Burnside Park, a Providence Journal reporter spotted a hand-written sign that compared the earnings of a minimum wage worker with those of Goldman Sach’s CEO, Lloyd C. Blankfein. The sign read: Minimum wage = $16,000/year CEO-Goldman Sachs (Lloyd Blankfein) $16,000/Hour. It goes without saying that Goldman’s CEO earns piles more money than most Americans, never mind Rhode Island’s minimum-wage workers. Ever since the New York investment bank accepted a $10-billion government bailout during the financial crisis in 2008, Goldman Sachs has made national headlines for its super-sized executive compensation packages. But we had our doubts about whether Blankfein, Goldman’s chief executive, actually earned in one hour what a minimum wage worker in Rhode Island earned in an entire year. So we decided to check it out. The facts The minimum wage in Rhode Island is $7.40 per hour, so simple math shows that someone who works 40 hours per week for 52 weeks (or 2,080 hours) will earn $15,392 a year. (The minimum wage was the same in 2010 as this year. Many minimum wage workers don’t get benefits, unlike CEOs. But we’ll get to that later.) The protest sign said $16,000, which is pretty close. But calculating the pay of chief executives is more complicated because a large share of their compensation is typically in the form of stock options, pension contributions and other non-cash payments. In 2010, Goldman reported it paid Blankfein a salary of $600,000 plus a bonus of $5.4 million, for a total of $6 million, according to its 2011 proxy statement , the most recent available data. That’s 375 times more than a minimum age worker would earn in Rhode Island. But it’s a mere $2,885 an hour, not $16,000. (We’re basing this calculation on a 40-hour work week.) But wait, there’s more. Besides his salary and bonus, the company reported that it gave Blankfein $12.6 million in restricted stock, boosting his annual compensation to $18.6 million. If he worked 40 hours per week, his hourly rate would amount to $8,942. And that’s without benefits. Goldman also paid Blankfein $464,067 in 401(k) matching contributions, term life insurance premiums, medical and dental premium payments, long-term disability insurance premiums, life insurance premiums and perks such as his company car and driver. (The protesters might have mentioned that the $185,000 Goldman paid for Blankfein’s car and driver last year is more than 31⁄2 times Rhode Island’s median household income in 2010 .) In all, Blankfein’s compensation in 2010 totaled about $19.06 million. But once again, simple math shows that the estimated cash value of his compensation that year is $9,165 an hour -- not $16,000 an hour as the protest sign declared. Our ruling The Occupy Providence protest sign was close when it stated that the minimum wage in Rhode Island is $16,000 a year (it’s actually just under $15,400). And its point -- that CEOs such as Blankfein make enormous sums of money while people at the bottom of the economic ladder make almost nothing -- is well taken. But the claim that Goldman Sachs’ CEO earned $16,000 an hour was way off. We rate it False . (Get updates from PolitiFactRI on Twitter . To comment or offer your ruling, visit us on our PolitiFact Rhode Island Facebook page.) (en)
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