Anger after bank reveals £7.9bn pay package as profits plunge

 

Click to follow
The Independent Online

Goldman Sachs, the City of London and Wall Street totem, will divvy up a £7.9bn pay and bonus pool among its global staff, despite public and political anger and in the face of crumbling revenues and profits.

The average compensation for Goldman employees works out at £239,000 – perhaps the most hotly anticipated single number to come out of the finance industry since the "Occupy" movements turned up the heat on banks.

Even though the investment bank said it had cut its compensation bill by more than a fifth, it still came out to about the size of the annual GDP of Albania and prompted an outcry from union leaders.

The figures were revealed alongside Goldmans' latest annual results, which showed how post-credit crisis regulations and volatility in the eurozone are hurting bank profits. Revenues fell 26 per cent in 2011, the bank said, and profits slumped by 47 per cent to £2.8bn.

Some 42.4 per cent of revenues will go to employees, in the form of salaries, bonuses and benefits, the company said, up from 40.5 per cent last year, though a bank spokeswoman said that an increase in pay and benefits was the main reason for the increase.

Year-end bonuses, handed out in the coming weeks, will be down more sharply than revenues, she said. Goldman also said it diverted £50.5m from its compensation pool to fund Goldman Sachs Gives, its charitable arm.

The bank has shed staff in some of its worst-hit operations and said it expected to save £907m in annual costs once the cuts were fully implemented. It ended the year with 33,300 employees, 2,400 fewer than 2010. It employs over 5,000 people in London.

TUC general secretary, Brendan Barber, accused Goldman of "brazenly defying their own sliding profits by dishing out pay and top bonuses worth almost £240,000 a head". He said: "This latest example of excessive rewards for mediocrity should give the Government the green light to get tough on top pay."

Comments