updated 3/1/2010 1:10:02 PM ET 2010-03-01T18:10:02

Goldman Sachs Group Inc. said Monday it has rejected demands by shareholders to investigate the Wall Street bank's compensation practices.

Shareholder lawsuits filed recently in New York and Delaware charge that Goldman's compensation levels in 2009 were too high, Goldman said in a Securities and Exchange Commission filing. The lawsuits seek to recover some of the pay and force the bank to adopt pay reforms. Goldman said shareholders have made similar demands in letters to its board.

Lawmakers and shareholders sharply criticized Wall Street pay after the biggest banks lost billions of dollars on bad mortgage bets, helped cause the recession and then had to be bailed out by the government.

In its filing, Goldman said government agencies and regulators have sought information about its pay practices. The bank said it was cooperating with those inquires but won't grant shareholders' demand for an internal probe or wider pay reforms.

"The board believes that the firm's compensation policies and practices, which directly align pay with the performance of the company, are appropriate and in the best interests of shareholders broadly," Goldman spokesman Ed Canaday said in a statement. "When the firm does well, our people do well and when the firm does less well, our people do less well."

Goldman employees received $16.2 billion in salaries and bonuses for 2009, up 47 percent from the previous year but lower than expected. That's about $500,000 for each of the bank's 31,700 employees. Many employees, however, earned millions.

Canaday noted that the bank set aside 36 percent of net revenue for compensation last year, down from an average of 46 percent since the company went public in 1999.

Goldman, which earned a record $4.79 billion profit in the last quarter, has been the strongest bank throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other banks and also has been more aggressive in its trading.

Mindful of criticism over its pay practices, Goldman shrank its bonus pool by $500 million in the fourth quarter and put the money into the bank's two-year-old charity, Goldman Sachs Gives.

The company is also paying more in restricted stock instead of cash. Goldman CEO Lloyd Blankfein received $9 million bonus last year. All the money was in restricted stock that can't be cashed out for five years. In 2007, Blankfein received a record $68 million bonus.

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