417 Partners?

[Me.]

Does Goldman Sachs really need that many partners? Isn't that what helps drag a company/bank down?

[Iggo]

1. They should get tested.

B-)

[Lucky Luciano]

2. It essentially means that they are the most senior bankers in the firm.

...and they bestow the title "partner" to such people...and they make a bloody fortune...they were making $10MM per year on avergae for the last few years.

[Me.]

3. That's My Point

No wonder they're failing, being as top heavy as they are

[Lucky Luciano]

5. Well....they did make a profit last year of $2.2B...

It is just that in the previous year they made roughly $10-12B. GS is actually pretty well run and very smart...they only got in trouble after LEH filed because short term funding dried up and if short term funding dries up then GS can be knocked out of business in very short order. They took money from the TARP to stem that crisis...and things have eased a bit since then, which is why they want to pay back the TARP money now - they do not think they need it anymore.

[TechBear_Seattle]

4. No

I'm not sure how, specifically, Goldman Sachs is organized, but in general....

A partnership is a type of business organization partners jointly own the risks and benefits of the enterprise. Partnerships have a number of tax benefits over corporations; for this, however, partners take on more personal risk and responsibility.

In large partnerships like Goldman Sachs, there are different types of partners. Typically these are labeled as senior partners, junior partners and limited partners. Senior partners actually run the company and serve as the firm's board of directors; they get a larger share of the firm's profits and, consequently, carry a larger legal liability. Junior partners serve as upper management and vice presidents, get a smaller share of the profits and carry less legal liability. Limited partners usually have no direct say in running the company and thus have little to no legal liability in the firm's operation. GS also has outstanding shares of common stock, which in effect makes all stock holders very limited partners; I would expect (but can't say for certain) that there are several senior partners elected by shareholders to represent their interests.

That GS has 417 partners is not surprising, not for a large, successful firm. I bet that the number of senior partners is similar to the number of people on the board of directors for a similarly sized corporation.

[On the Road]

6. TechBear, You Sound Like You Know Something About This

but what I don't understand is how a company can be a partnership and also offer stock.

Large accounting firms are generally partnerships. Ownership is private and divided among the partners. As a result you can't buy stock in Deloitte, Ernst, Pricewaterhouse accounting business.

However, Goldman Sachs is a public company. You can buy stock in it (I own a little). How then do they have partners?

[TechBear_Seattle]

8. I did some digging....

Goldman Sachs went public in 1999; before then, it was a privately held partnership. According to the Wikipedia article on the company:

One of the largest events in the firm's history was its own IPO in 1999. The decision to go public was one that the partners debated for decades. In the end, Goldman decided to offer only a small portion of the company to the public, with some 48% still held by the partnership pool. 22% of the company is held by non-partner employees, and 18% is held by retired Goldman partners and two longtime investors, Sumitomo Bank Ltd. and Hawaii's Kamehameha Activities Assn (the investing arm of Kamehameha Schools). This leaves approximately 12% of the company as being held by the public.

It seems that GS was started as a partnership and remained a partnership for much of its life. At some point it incorporated and issued stock, but kept the "partner" nomenclature as part of their corporate traditions. So, again, the fact that it has 417 partners is probably not significant.

[cliffordu]

7. All they need to do is raise their

rates for the 'half and half' and the 'around the world' and they'd be solvent.....

[FLAprogressive]

9. Based on your thread title I thought you were watching "Maury"