Goldman Sachs is facing a lawsuit from an institutional investor over the bank’s upcoming round of bonuses.

The lawsuit, brought by the Security Police and Fire Professionals of America Retirement Fund and filed with the New York Supreme Court, attacks the multi-billion dollar payouts as “blindly” rewarding senior figures regardless of the performance of employees.

The case comes just a day after Citigroup and Wells Fargo announced plans to raise and combined USD45 billion through existing funds and share issuance that will free the banks from the US government’s troubled asset relief programme (TARP) and direct control from the state. Goldman Sachs, by contrast, repayed its USD10 billion loan in June.

But the pension fund – represented by shareholder and corporate governance law firm Grant & Eisenhofer - claims that the estimated USD22 billion to be distributed to employees was a direct result of taxpayer support. It adds that the bank distributes half of its reported annual net revenue to employees regardless of their performance. It is unclear if other investors will join the lawsuit and create a class action.

Goldman also managed to make around USD29 billion by issuing debt insured by the Federal Deposit Insurance Company at the height of the financial crisis in autumn 2008 through the Temporary Liquidity Guarantee Program. CEO Lloyd Blankfein and COO Gary Cohn are among the board members names as defendants.

The action comes five days after Goldman Sachs released a statement outlining changes to its remuneration for its management committee. Thirty directors will receive all of their discretionary compensation in the form of equity, or so called ‘Shares at Risk’, which are subject to restrictions for five years. This format, the bank states, “includes an enhanced recapture provision that will permit the firm to recapture the shares in cases where the employee engaged in materially improper risk analysis or failed sufficiently to raise concerns about risks”.

The famously secretive bank has attempted to improve its public image by announcing an estimated USD150 million in aid to small companies, along with a USD61 million investment in affordable housing.

Goldman Sachs had yet to return ISJ’s calls at time of writing. More reaction and analysis to come.