Goldman Sachs Group Inc., the world’s biggest securities firm, said its senior management and board were sued by a shareholder claiming the company overpaid executives and misled investors about the value of stock options.

In the lawsuit filed with U.S. District Court, shareholder Jeffrey Bader alleges that Goldman’s chief executive officer, Lloyd Blankfein, received 2006 pay worth $60.2 million when stock options are correctly valued using the Black-Scholes model. That figure is higher than the $54.7 million in compensation reported by the company, according to the lawsuit.

Goldman’s compensation last year to Mr. Blankfein and his two deputies, co-presidents Gary Cohn and Jon Winkelried, set a record for executive pay on Wall Street. The awards came after the company’s profit rose 70% and its stock price climbed more than 50%. In all, Goldman set aside $16.5 billion to cover employees’ salaries, bonuses and benefits, 40% more than in 2005. The total number of employees rose 12% to 26,467.

The firm’s proxy statement “materially understates the total compensation of the CEO and the other named executive officers,” the complaint said. “The board of directors has committed waste in the matter of executive pay.”

A spokesman for New York-based Goldman, Lucas van Praag, said “we think the suit is entirely without merit and will contest it vigorously.”

The lawsuit, filed March 16 in New York, seeks to prevent Goldman from holding its annual meeting next week or to refrain from reelecting directors unless the proxy is amended. The lawsuit also requests that the individual defendants make reparations.

“Courts of equity have vast power to determine how the relief should be given, whether it’s with money or a reduction of the amount of options granted,” an attorney representing Mr. Bader, Arnold Gershon, said.

Mr. Gershon said his law firm, Barrack, Rodos & Bacine, consulted an expert to calculate the value of the options granted to Mr. Blankfein and the other executives. The calculations arrived at different figures than those reported by Goldman, he said.

“They say they use a Black-Scholes value and we’re saying that a Black-Scholes value does not equal this amount with these assumptions,” Mr. Gershon said.

The Black-Scholes Option Pricing Model was developed by Fischer Black and Myron Scholes to estimate the fair value of option contracts. The model uses among other data, interest rate levels and the price volatility of the underlying security to gauge the contracts.

Goldman today filed an amended proxy statement that includes a description of Mr. Bader’s lawsuit and a new proposal from a shareholder activist, Evelyn Davis, that calls for the firm’s board to stop granting new stock options or repricing or renewing existing options. The board recommends that shareholders vote against the proposal. Goldman is scheduled to hold its annual meeting on March 27.