Professional Documents
Culture Documents
Briefing Toolkit
At the heart of Greg Smiths complaint is an assertion that the firms culture and values have deteriorated, and, as stated above, we take those issues very seriously. That is why we did an extensive review of his claims, as vague as they were, and found no evidence to substantiate them.
To date, 35 of the 39 recommendations have been implemented, and the remaining four recommendations are expected to be fully implemented by the first quarter of 2013. (Read the Summary and Report of the Business Standards Committee.)
Strengthening Our Business Standards and Practices. o o Creation in May 2010 of the Business Standards Committee: Extensive review of business standards and practices across every major business, region and activity. Examples of actions taken to date include: Enhanced framework for evaluating suitability of structured products for different client segments. Introduced new pre- and post-transaction sales responsibilities. New efforts to communicate more clearly with clients around conflicts. Created Client and Business Standards Committee to put the client franchise at center of decision making. Elevated focus on clients in performance reviews and recognition decisions. Reorganized how we publicly report our results to provide greater clarity and visibility on the importance of the client franchise. Our chairman and CEO spoke with the global managing director population in 23 sessions around the world on the importance of client service, reputational risk and culture. Conducted more than 90,000 hours of training and development across every level of the firm associated with the BSCs recommendations; over 34,000 hours of training for vice presidents, with the bulk of that focused on client relationships and responsibilities.
Enhancing Our Financial Stability. Since the end of 2007: o o o o Our gross leverage, or assets relative to shareholders equity, has fallen by 50 percent to 12.9x. The amount of common equity we hold has risen by more than 70 percent to $68.3 billion. Our pool of available liquidity (cash or liquid instruments) has increased nearly three-fold to $170 billion and represents 18 percent of our balance sheet. The amount of illiquid, difficult to price assets (Level 3) has fallen by nearly a third, representing 5.1 percent of our balance sheet. From 2008, the time period before any employee can sell granted Restricted Stock Units (after tax) was extended from three to five years. In 2009 and 2010, we expanded forfeiture and clawback provisions for all employees who were granted equity (i.e., if an employee fails to appropriately analyze certain risks or fails to raise concerns about risks that can impact the firm or broader financial system; if there is a significant deterioration in the firms financial condition). All Named Executive Officers (NEOs) must retain 75 percent of the shares they receive as compensation for as long as they are NEOs. In 2010 and 2011, 70 percent of the variable compensation paid to our NEOs is in the form of Restricted Stock Units. Compensation has grown more slowly than net revenues and book value per common share since our IPO.
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