After a report concerning questionable executive compensation payouts an investigation on behalf of current long term investors in Goldman Sachs Group, Inc. (NYSE:GS) over potential breaches of fiduciary duty related to the historical and potential compensation that was awarded certain senior officers and executives of Goldman Sachs was announced.

Kenneth R. Feinberg, the Obama administrations special master for executive compensation, reviewed over the past five months compensations paid to the 25 highest earners of 419 banks between October 2008, when the first US Troubled Asset Relief Program funds were dispensed, and February 2009, when the stimulus bill took effect. Kenneth Feinberg said he immediately excluded most of the 419 companies from his examination because they said they didn't pay any executives more than $500,000, but he wound up citing 17 banks for making troublesome payments. 11 of the 17 banks making troublesome payments have already repaid the government for money they borrowed under TARP.

Mr. Feinberg determined that banks paid out $1.6 billion in unwarranted bonuses, retention awards, stock grants and 'golden parachute' retirement packages to their top earners at the height of the financial crisis.

The Goldman Sachs Group, Inc., the bank holding, global investment banking, securities and investment management company located in New York, is among the 17 companies. Another of the other 16 companies was Citigroup, which was reportedly identified for having the most egregious compensation packages, according to government officials with knowledge of Mr. Feinbergs report. Citigroup reportedly handed out several hundred million dollars in pay in 2008 as it neared collapse. Nearly two-thirds of the payouts amount to Andrew J. Hall, owner of a nearly 1000 year old German Medieval Castle, who reportedly received a payout of more than $100 million in connection with spin-off of Citigroups Phibro energy trading unit for $370 million to Occidental Petroleum in 2009.

In most cases the banks told Feinberg that they were obligated by employment contracts to pay the bonuses and other compensation, but Kenneth R. Feinberg said to reporters that those 17 companies exercised 'poor judgment' for making the $1.6 billion in 'ill-advised payments' to their top paid employees shortly after accepting TARP funds from the federal government. 'They shouldn't have made these payments,'' Feinberg told reporters. 'They were ill-advised. They were troublesome.'

According to the investigation by a law firm the investigation on behalf of current long term investors in the Goldman Sachs Group, Inc. (NYSE:GS) stock focuses, among other things, on possible shareholder claims that certain of Goldman Sachs senior officers were unjustly enriched through their receipt of unwarranted, excessive or unearned compensation in past years. Certain senior officers and executives at Goldman Sachs Group, Inc. were awarded salaries, bonuses, stock options and other forms of long-term, incentive or retirement compensation that were, so the investigation, excessive or unwarranted based on the Goldman Sachs performance.

Banker Lloyd Blankfein, the chief executive officer and chairman of Goldman Sachs & Co, who said but later revoked as a joke that he is doing 'God's work' earned a total of $53.4 million in 2006 as one of the highest paid executives, received in 2007, a salary of $600,000 plus $27 million bonus and $26 million in stock awards, while Goldman Sachs got $10billion TARP Funding.

The investigation by the law firm focuses on claims that the prior compensation awarded at the Goldman Sachs Group, Inc. (Public, NYSE:GS) is now clearly improper based upon its current operating condition.

Goldman Sachs Group, Inc. reported in 2007 Total Revenue of $87.968billion, in 2008 $53.579billion, and in 2009 less than $52billion. Goldman Sachs Group, Inc. reported in 2007 a Net Income of $11.599billion and in 2008 a Net Income of $2.322billion and a Net Loss of $780million. Shares of Goldman Sachs Group, Inc. (GS) traded in 2007 as high as $235.92 per share, but fell in 2008 to as low as $53.31 per share. GS shares were able to recover in 2009 to as high as $189.30 per share and recently traded at $147.67 per share, but werent able to reach its 2007 high. Goldman Sachs recently announced that it will pay $550 million, the largest-ever penalty paid by a Wall Street firm, to settle SEC charges the firm misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

Goldman Sachs faces also a lawsuit filed on April 26, 2010, in the United States District Court for the Southern District of New York by purchasers of the common stock of Goldman Sachs Group, Inc. (NYSE:GS), who purchased their GS stock between October 15, 2009 and April 16, 2010. The plaintiff alleges that Goldman Sachs certain of its officers and executives with violations of the Securities Exchange Act of 1934.

Finally and most importantly the investigation focuses also on possible claims that would allow Goldman Sachs Group, Inc. (NYSE:GS) stockholders to influence or control future compensation decisions at Goldman Sachs Group, Inc.

Within the industry huge amounts have been allocated for payout and bonus. Goldman Sachs is reportedly paying out an average of $544,000 per worker, though many could earn several times that amount, JP Morgan Chase on average pays about $400,000, and Morgan Stanley pays about $262,000. Morgan Stanley reportedly put aside $8.3 billion for pay and benefits during the first half of 2010, 44% more than during the same period last year. Goldman Sachs put aside $3.8 billion for pay and benefits in the second quarter equivalent to 43% of total quarterly revenue in addition to $5.5 billion in the first three months.