Goldman Sachs handed its chief executive, Lloyd Blankfein, a bonus of $7m (£4,4m) in shares for his work last year, down from $12.6m in 2010 in line with the investment bank’s slipping profits.

The figure, revealed last night, does not yet complete the picture of Mr Blankfein’s pay. Shareholders know that he also has an annual salary of $2m but Goldman is yet to publicise details of any cash bonus he may have been given on top. His total compensation for 2010 was $18.6m.

In common with the rest of Wall Street, Goldman’s fortunes have ebbed over the past 12 months, as the lessons of the credit crisis crimped trading activity and new regulations to tame the finance industry kicked in. Bond trading in particular has suffered.

However, the bank said last month that it had still been able to amass a pay and bonus pool for its employees of $12.2bn, about the size of the GDP of Albania.

Four other top executives – chief operating officer Gary Cohn, chief financial officer David Viniar and vice-chairmen Michael Evans and John Weinberg – received the same restricted stock bonus as Mr Blankfein.

Source: The Independent, By Stephen Foley

 
A messy court case has shed light on Australia’s richest and most secretive family.

Already Australia’s richest woman, Gina Rinehart has been tipped to overtake Carlos Slim and Bill Gates as the world’s wealthiest person in years to come. But her billions – the proceeds of vast iron ore deposits – have not brought her happiness, judging by a bitter family feud that was exposed this week.

Ms Rinehart, 57, is being sued by three of her children – John Hancock, 35, Bianca Rinehart, 31, and Hope Welker, 26 – who want her removed as head of the family trust. Details of the dispute remain sketchy, thanks to a court order but the latest twist of the legal battle has led to the release of emails in which the mining magnate’s daughters beg her for money, bodyguards and domestic staff, with one complaining of being “down to my last A$60,000 [£40,770]“.

Dubbed the “Iron Lady”, Ms Rinehart – whose fortune was estimated by Forbes magazine this week to have doubled to US$18bn (£11.38bn) in the past year – has a reputation for penny-pinching. Hope, Bianca and John are said to have grown tired of waiting for their inheritance. Her youngest daughter, Ginia, 25, who has sided with her, has reportedly been anointed to take over the vast minerals empire.

The emails – which date from July and August last year, just before the legal action was launched – were submitted to the New South Wales Supreme Court, to support Ms Rinehart’s claim that publicity about the dispute would jeopardise her family’s safety. However, the judge was unimpressed and released the material which gives a rare insight into the life of the Perth-based tycoon.

The judge also disclosed a security report commissioned by Ms Rinehart, which concluded that the family would be at risk of abduction, robbery and harassment by “criminals, deranged individuals and issue-motivated groups” if the court order was lifted. The report likened their plight to that of celebrities such as David Beckham, David Letterman and the singer Joss Stone.

In the emails, Ms Welker and Bianca Rinehart voiced fears about their security. “I don’t think you understand what it means now that the whole world thinks you’re going to be wealthier than Bill Gates – it means we all need bodyguards and very safe homes,” Bianca, who lives in Vancouver with her husband, Sasha, and son, Nicholas, told her mother. “I don’t have the money to protect myself or my children and it scares me.”

But Ms Welker, who lives in New York with her husband, Ryan, and two small children, also had more prosaic concerns. As well as a bodyguard, she wanted a chef – “so you can be sure April [her daughter] is fed right” – and a housekeeper “that is good [with] kids so if I need to go out I can”. She told her mother: “Even my friends who have nothing compared with your wealth have more staff.” What about Ms Rinehart paying those three salaries as a birthday present, she suggested.

While Ms Rinehart’s responses were not recorded, she is bound to have been mortified by publication of the emails. Despite her prominent role in Australia’s booming mining industry, she has never given an interview, and is said to shun friends indiscreet enough to talk about her. Exceedingly litigious, she has, reportedly, few interests outside work.

During a flight to India last year, she talked about coal non-stop, according to a profile of her in Good Weekend, a magazine published by Australia’s Fairfax Media group. This week, the profile subject became Fairfax’s biggest shareholder, apparently aiming to increase her political and media influence.

She already owns a stake in television network Channel Ten. Some fear she will use those interests to promote her views, which include a push to import cheap labour from overseas.

The sole heir of Lang Hancock, who spotted iron ore deposits in Western Australia’s Pilbara region while flying low to avoid a storm, Ms Rinehart is said to have worshipped her father. The pair fell out when, after her mother’s death, he married his much younger housekeeper, Rose Porteous. Ms Rinehart called her stepmother a “Filipina whore”, and after Hancock’s death hired private detectives to try to prove that Ms Porteous was to blame.

She herself married young, had John and Bianca, got divorced, then married an American corporate lawyer nearly 40 years older than her. Frank Rinehart, with whom she had Hope and Ginia, died in 1990.

In 1997 local media reported that Ms Rinehart had reached an out-of-court settlement with her former security guard, Bob Thompson, who had accused her of sexual harassment. Mr Thompson later told Woman’s Day magazine that she had been besotted with him and wanted to marry him. “I told her over and over I wasn’t interested, but she wouldn’t take no for an answer,” he said.

Details of her dispute with her children are likely to emerge in the coming weeks. Meanwhile, her wealth continues to grow, fuelled by China’s demand for iron ore. She could soon overtake Christy Walton, the Wal-Mart heiress who is the world’s wealthiest woman, and after that – some believe – she could knock Mr Slim, the Mexican telecommunications mogul off the top perch.

Iron Lady: The rich life

Gina Rinehart’s fortune doubled to $18bn last month after her mining company signed a deal with South Korean steel giant Posco, which will take a 15 per cent stake in in Western Australian iron ore mine.

Earlier this week, her company Hancock Prospecting became the biggest shareholder in Sydney publisher Fairfax Media. She increased her stake from 5 per cent to 13 per cent. She also owns a 10 per cent stake in Australian broadcaster Ten Network Holdings Ltd.

In the next few years she plans to expand her iron ore operations and develop two coal projects. If commodity prices hold up, Forbes magazine tips her to become the world’s richest woman.

Source: The Independent, by Jenny stevens

 
1. Sean “Diddy” Combs ($500 million)
Over the years, Sean Combs has changed his stage name from “Puff Daddy” to “P. Diddy” to “Diddy.” Lately, he’s taken to calling himself “Ciroc Obama,” and for good reason: his vodka deal with beverage giant Diageo could soon land him in some very exclusive company. Diddy receives an annual cut of profits and a big chunk of cash if Ciroc is ever sold. With the spirit’s value soaring toward $1 billion—on top of stakes in clothing lines Sean John and Enyce, marketing firm Blue Flame and record label Bad Boy—Diddy may be beat buddy Jay-Z, featured on last year’s cover with Warren Buffett, to the Forbes 400.

2. Shawn “Jay-Z” Carter ($450 million)
Beyonce’s husband sold his Rocawear clothing label for $204 million in 2007 and signed 10-year $150 million Live Nation deal in 2008. He holds stakes in the New Jersey Nets, his 40/40 Club chain, ad firm Translation, cosmetics company Carol’s Daughter and other businesses. His lyrical boasts appear accurate: “I’m like really half a billie … you got baby money.” (For more on his rise as a businessmen, check out Zack’s Jay-Z biography, Empire State of Mind).

3. Andre “Dr. Dre” Young ($250 million)
The bulk of Dr. Dre’s wealth comes from his involvement in Beats Electronics, the headphone maker he founded with Interscope chief Jimmy Iovine in 2008. Earlier in August, handset maker HTC paid $300m to buy a 51% stake in the company. Sources say Iovine and Dre each owned a third of the company before the deal; FORBES estimates that Dre will take home $85 million after taxes. The agreement also values his remaining stake at $100 million, which could increase rapidly as the company continues to expand.

4. Bryan “Birdman” Williams ($110 million)
The New Orleans-born rapper-turned-mogul cofounded Cash Money Records with brother Ronald two decades ago and inked a very favorable $30 million distribution deal with Universal in 1998. His label’s value has soared with the success of rappers Drake, Nicki Minaj and Lil Wayne, all of whom made this year’s Hip-Hop Cash Kings list. (For more, read FORBES’ feature story, “Birdman’s Billion Dollar Dreams”).

5. Curtis “50 Cent” Jackson ($100 million)
After receiving $100 million for his Vitaminwater stake in 2007, 50 spent freely on cars and renovations to mansion formerly owned by Mike Tyson. But a nice cushion remains from his back catalog, acting gigs and 50 Cent-themed videogames, books, clothes and headphones.

Source: Forbes

Mike Lazaridis, Greek Rich List’s 5th richest Greek in the world, and co-CEO Jim Balsillie step aside after a long slide in the BlackBerry maker’s stock value, market share.

Research in Motion’s co-CEOs Mike Lazaridis and Jim Balsillie have quit after a tumultuous period at the company, which saw intense competition, declining sales, a failed tablet debut, and a long services outage at the maker of the BlackBerry over the last two years. The company is in the midst of replacing its BlackBerry operating system and product line with a new platform based on the QNX operating system it acquired in 2010. The first “BlackBerry reboot” products are due in late 2012.

An insider, COO Thorsten Heins, has taken charge as president and CEO, to implement the succession plan previously submitted to the board by the former co-CEOs, RIM said in a statement late Sunday. Heins joined RIM from Siemens Communications Group in December 2007 as senior vice president for hardware engineering and became COO for product and sales in August 2011.

[ Learn about consumerization of IT in person March 4-6, 2012, at IDG's CITE conference in San Francisco. | Get expert advice about planning and implementing your BYOD strategy with InfoWorld's 29-page "Mobile and BYOD Deep Dive" PDF special report. | Keep up on key mobile developments and insights with the Mobilize newsletter. ]

Heins told the Toronto Globe and Mail newspaper that he intended to pursue the strategy set by Balsillie and Lazarids, including the move to a new BlackBerry platform. He also said he would be open to licensing that platform to other device makers. In a statement published by RIM, Heins said, “It is Mike [Lazaridis's and Balsillie's] continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today. I share that philosophy and am very excited about the company’s future.”

Lazaridis and Balsillie have also quit their positions as co-chairmen; director Barbara Stymiest takes over as the new chairman. Lazaridis, a founder of the company, will become vice chairman, and Balsillie will remain a board member. Lazaridis will also chair a newly created “Innovation Committee,” and will work closely with the new CEO to offer strategic counsel, provide a smooth transition, and continue to promote the BlackBerry brand worldwide, RIM said.

Will CEOs’ resignation be enough to turn RIM around?

Investors in Research in Motion have been calling for change at the Blackberry maker since profits started falling last year, and on Sunday they got their wish.

Co-chief executives Mike Lazaridis and Jim Balsillie announced they have resigned as the heads of the Waterloo, Ont.-based company.

Former chief operating officer Thorsten Heins will take over as CEO, while Lazaridis and Balsillie will remain on the company’s board of directors.

RIM’s slide in the last few years has been remarkable. In 2008, it was Canada’s most valuable company, with a stock share price of $148. On Friday, shares closed at $17.24.

Its share of the smartphone market has dwindled as competitors Apple and Google surged ahead with their respective iPhone and Android devices. The Blackberry Playbook, RIM’s answer to Apple’s iPad tablet, sold poorly, and the company was forced to sell it at a deep discount.

RIM investors have been pressing for change in the company’s management structure. Some have been calling for the company to be sold, or for the consumer product division to be broken apart from the enterprise business.

Will the resignation of RIM’s CEOs be enough to turn the company around? Does more need to be done to regain investor confidence? Let us know in the comments below.

Sources: CBC News/Info World

The luxury goods sector remains one of the strongest globally as the super wealthy keep spending in the face of wider economic turmoil.

Sales for the three months to the end of December were up by 24 per cent from €2.11bn on a year earlier, beating analysts’ expectations.

Johann Rupert, the executive chairman and group chief executive officer, said: “The group’s overall performance remains solid. Operating profit for the full year will be significantly higher than last year.”

Richemont, which owns some of the biggest jewellery and watch brands including Cartier, Jaeger-LeCoultre and Piaget, said growth was solid across all regions, with Asia-Pacific the strongest.

Sales growth in Europe benefited from what experts have dubbed TLC, the “travelling luxury consumer”.

Its online designer outlet Net-a-Porter.com also performed well.

However, some experts have pointed to a slowdown in growth as a sign that the sparkle of the sector could begin to tarnish.

Mr Rupert said: “As expected, the slowdown in sales growth relative to the first six months of the year reflects the volatile and challenging economic environment.”

Source: The Independent

Deputy Prime Minister Nick Clegg.  Photo: Leon Neal/PA

Nick Clegg is demanding a “tax the rich” Budget in March to head off growing fears that the Coalition will lose public support because its deficit-reduction programme is seen as unfair on ordinary families.

The Liberal Democrats are urging George Osborne to include a mansion tax on homes worth £2m and measures to stop the rich avoiding stamp duty when they sell their properties by transferring ownership to a shell company.

Although it is thought the Chancellor is unlikely to introduce a high-value property tax immediately, he may set up a review to look at raising the tax burden on the rich by targeting property assets rather than income, which would be harder to avoid. Mr Osborne is likely to act on stamp duty, amid evidence that rich people reduce the 5 per cent stamp duty on the sale of homes worth £1m to only 0.5 per cent by placing their property in a company.

Mr Clegg and other Liberal Democrat cabinet ministers will make their demands in behind-the-scenes talks with Mr Osborne before his Budget on 21 March. Other Liberal Democrat proposals include a tax on land values and scrapping the 40 per cent tax relief on pension contributions for higher-rate taxpayers. They also want a new crackdown on “non-domiciles” – foreign residents living in Britain who do not pay tax on their overseas earnings.

Today, Mr Clegg will join the debate about “responsible capitalism” before a speech on “moral markets” by David Cameron later this week. The Deputy Prime Minister will call for millions of workers to own shares in their companies in a new “John Lewis economy”.

A source close to Mr Clegg said: “Nick is pushing his government colleagues for real, early, radical action on this. Employee ownership is part of a long liberal tradition.”

Senior Liberal Democrats are worried public support for spending cuts could melt away unless the rich shoulder more of the burden.

Higher taxes for the rich are popular with the public and the Liberal Democrats do not want to be defined in the year ahead by their pro-European stance, which is not supported by a majority of voters. They believe the Tories might be persuaded to act on property values because opinion polls suggest they are seen by many voters as “a party for the rich” rather than “people like us.” To increase the pressure on Mr Osborne, some Liberal Democrats plan to join Labour to try to bring in a mansion tax if it is not included in the Budget.

Lord Oakeshott of Seagrove Bay, a Liberal Democrat peer and close ally of the Business Secretary, Vince Cable, said: “A mansion tax is the real test of whether the Coalition means business on fair taxation. You can’t claim ‘we are all in it together’ when wealth is virtually untaxed.”

Source: The Independent

An investigation has been announced. But the failure to clamp down sooner is unlikely to impress the international inspectors who are arriving in Athens this week to assess the government’s efforts to reduce the country’s debt.

Despite repeated promises to act, Greece has thus far seemed powerless to tackle the tax evasion and fraud that are costing billions. It was announced recently that companies were avoiding up to €32 billion (£27 billion) in taxes a year while individuals, many of them wealthy professionals or businessmen, owed €5 billion. This is more than 10% of the country’s €350 billion debt.

Thousands of Greeks are suspected of collecting the pensions of dead relatives at a cost of yet more millions to the state. About 800,000 civil servants can claim a bonus simply for turning up to work on time.

“In the past, laws have been passed but the necessary decrees have not been signed,” a senior government official said in an effort to explain the continuing waste. “The poor functioning of the state has been a serious obstacle to proceeding with reforms.”

Growing doubts over Greece’s ability to deal with its debts have intensified speculation about whether it will be able to stay in the single currency. Talks on reducing the debt in exchange for the release of loans from the European Union broke down on Friday evening. Economists are debating whether a “velvet divorce” is possible under which Greece would abandon the euro without triggering a break-up of the currency.

Inspectors from the so-called troika — the European commission, the International Monetary Fund and the European Central Bank — are expected this week to seek guarantees of progress with promised fiscal and structural reforms from Lucas Papademos, the Greek prime minister, in exchange for a previously agreed €130 billion bailout.

The Greek health ministry, at least, is notching up some results: after months of research it announced that it had identified parts of the country with suspiciously high incidences of severe handicaps, suggesting “sufferers” were fraudulently claiming benefits. The region of Viotia in central Greece, for example, had a disproportionately high number of asthma sufferers. The island of Kalymnos is apparently ridden with mental illness. On the tourist island of Zante, 600 people — almost 2% of the population — were said to be blind.

It also turned out that more than 1,000 people in Greece’s second city of Thessaloniki were listed as “severely disabled”. According to Markos Bolaris, a deputy health minister, this number “would have been appropriate if Greece had fought in the Vietnam war”. Some 210,000 people receive benefits for serious disabilities, which Bolaris described as a “provocatively” high number. It is suspected many claimants should not qualify for benefits but have bribed their doctors to give them the necessary paperwork saying that they do.
The ministry has pledged to investigate. The government hopes to trim at least €250m from the €6.2 billion spent each year on social welfare benefits. Will that be enough to satisfy the EU?

As part of the EU bailout agreement, Greece is urging private bondholders to accept a “haircut” of at least 50% on what they are owed. Some are refusing to co-operate in the hope that Greece will eventually default on its debt, allowing them to profit from insurance payouts.

Failure to secure a deal with private bondholders could put at risk further EU aid, without which Greece will not be able to meet the repayments of €14.5 billion in bonds falling due in March. This could lead to a default.

With unemployment at 18% — among those under 25 it is 43.5% — and with no prospect of the economy emerging any time soon from the abyss, the picture is so grim that many Greeks have abandoned the country. In despair of finding work in the cities, others are going back to the land.

Behind the exodus from Athens is the widespread fear that things will get worse: the government’s failure to meet fiscal targets has prompted speculation that the visiting troika inspectors may demand new austerity measures to make up the shortfall. Greece fears being pared to the bone.

Source: The Sunday Times, by Matthew Campbell and Philip Pangalos

Soho House New York poolside, during a Sex and The City episode.

The sale of the group – for £250million – makes it the most valuable private members’ club of its kind in the world and marks an astonishing rise for a tiny Soho haunt set up in 1995 that grew into a global empire.

The club, which has four branches in London – the original Soho House, Shoreditch House, Electric House in Notting Hill and High Road House in Chiswick – was set up as an exclusive but relaxed venue for the great and good in London’s film and media industries as an antidote to the stuffy traditional clubs of St James’s.

Now it will form the jewel in the crown of US supermarket billionaire Ron Burkle, a close friend of Bill and Hillary Clinton.

Mr Burkle, who is worth an estimated $3.2 billion, is said to be buying a 60 per cent stake in the group.

Mr Jones is selling half his 20 per cent holding for around £25million, while his business partner, West End restaurateur Mr Caring, will make around £125 million from the sale of a 50 per share. He will continue to own around 30 per cent.

Mr Jones, who is married to broadcaster Kirsty Young, will stay on as chief executive while Mr Burkle will become chairman.

The deal will help fund the expansion of the group, which has new openings planned for Mumbai, Istanbul, Toronto and Chicago in the next two years and a number of other sites “under consideration.”

Mr Jones said: “Ron believes in the way we do things and the resilience of our membership offering, as well as sharing our vision to create a global company with the same integrity and commitment to quality that was at the heart of our very first Soho House in London.” As well as the three London clubs, the company also owns clubs in Miami, Berlin, West Hollywood and New York.

It also owns restaurants such as Hoxton Grill, Pizza East and Cecconi’s and hotels such as the Dean Street Townhouse and Babington House in Somerset. Mr Caring paid £105million for his 80 per cent stake in Soho House in 2008 in a deal that valued the business at just above £130million. It has doubled in value since then.

In 2007 Mr Caring paid £90million for Annabel’s and three other nightclubs – Mark’s Club, George and Harry’s Bar.

Source: London Evening Standard

The screen of a ‘Dolphin Treasure’ slot machine.

Behar Merlaku has claimed damages of five million Euros against the casino who have denied the Swiss resident his money. The case has been ajorned until April after the two sides failed to reach an agreement in court in Feldkirch.

The 26-year-old trainee floor-layer was visiting the casino in Bregenz, Austria with his wife in March 2011 when he hit the jackpot. The red light signalling “Jackpot” lit up on the “Dolphin Treasure” machine at around 4am and the fanfare was heard around the casino. For a short time Merlaku was a millionaire having apparently won 42,949,672.86 Euros. The casino maintain however that “it was a software error”.

Merlaku has demanded five million Euros from the casino who have offered just 500,000 Euros. The wife of the winner from Switzerland and three employees from the casino will be summoned to the next hearing. A technical report about the machine will also be compiled through which the end to Merlaku’s game can be reconstructed.

The apparently dud machine was removed from the casino immediately and was taken to a warehouse where it will now be reclaimed and tested. According to the casino, such a machine has a maximum win of 4,500 Euros.

Source: Austrian Times

One of the few certainties of the Iowa caucuses is that they have given us a snapshot of the increasingly torrid romance between money and politics.

Massive amounts of cash will be spent by the candidates in 2012, but even more will be spent by so-called outside organizations.

Because of the Supreme Court’s Citizens United ruling, the ongoing drift away from transparency by the Federal Election Commission, and the creativity of activists looking for new ways to funnel money into politics, the very rich now have a wide array options when they want to influence elections.

They can give, within limits, to the candidates themselves or, within higher limits, to the national parties. They can give limitless amounts to super PACs. They can give personally or through their companies. If they give to certain types of non-profit groups, they can give anonymously.

You have to wonder whether the wizards who devised credit default swaps, collateralized debt obligations and other financial vehicles that led to our economic woes have moved on to campaign finance.

In fact, the two trends have similar roots. Complex investment vehicles were invented when investors had more money to invest than instruments to invest in. One could say the same about political contributions.

In the past, when the very rich hit the spending ceilings, they ran out of places to put their cash.

Not any more.

And the new secrecy surrounding contributions is likely to entice new contributors among affluent individuals who have been reluctant to publicize their personal politics.

Many donors regard political contributions not as an expression of philosophy, but as a bet on future benefits. It’s not at all unusual for wealthy contributors to give to both the Democrats and the Republicans, so they’re covered no matter who wins. (This seems more common with multimillionaires than with billionaires, who enjoy access almost everywhere.)

So let’s take the campaign-spending/financial-investment analogy a step further. Remember where a huge money pool, combined with reduced transparency, lax regulation and more complicated investments, led us in 2008?

Near meltdown would be a generous description – not only for the economic crisis but for the recent paralysis in Washington.

At the risk of pushing the comparison too far, one might even suggest, regardless of political persuasion, that we have toxic assets and defaults in government, just as we do in finance. (We’ll let you decide who they are.)

A sign that some billionaires are seeing the risks and pulling out – as some did when the housing bubble neared the bursting point – can be read in the comments of Starbucks Chairman and CEO Howard Schultz, who has pledged to stop contributing to campaigns.

Of course, the current crisis is not entirely the fault of billionaires. The new political funding channels aren’t limited to the very rich. But obviously, the more you have, the more you can spend.

Because of their ability to give anonymously and through various companies, we’ll never have a complete picture of political spending by billionaires.

Below is a list, showing Greek contributions of $20,000 or more in 2010 and 2011.

John A. Catsimatidis
Cantor Victory Fund – $20,000 – 11/18/2011
National Republican Senatorial Committee – $25,000 – 9/28/2010
Republican National Committee – $30,800 – 3/25/2011

James S. Davis
National Republican Senatorial Committee – $25,000 – 1/29/2010
National Republican Senatorial Committee – $29,800 – 3/31/2011
Restore Our Future PAC – $500,000 – 6/15/2011
Scott Brown Victory Committee – $30,000 – 3/29/2011

Michael Jaharis
Republican National Committee – $30,400 – 4/12/2010
Republican National Committee – $30,800 – 6/30/2011

Alex G. Spanos
Republican National Committee – $30,800 – 6/15/2011
Republican National Committee – $30,800 – 6/15/2011

You find out more about US Greek millionaires in Greek Rich List magazine’s US section.

Source: Forbes, Laurie Bennet, Contributor. Follow her on Twitter: @Muckety