Goldman Sachs rewards staff with £9.6bn
Wednesday 19 January 2011
Wall Street banking giant Goldman Sachs revealed today that staff earned a total of 15.4 billion US dollars (£9.6 billion) in pay and bonuses last year - equivalent to around £270,000 per employee.
The total figure represents a 5% decline on the previous year's pot, but the share of revenues paid out in salary and benefits for 2010 was up from 35.8% at 39.3%.
The firm, which employs around 6,000 staff in the UK who are all eligible for performance-related bonuses, posted a 38% drop in net earnings to 8.35 billion US dollars (£5.23 billion) for the year to December 31. This followed a 13% decline in revenues to 39.16 billion US dollars (£24.51 billion).
The figures are the latest in the annual results season for major US banks and will be watched closely on these shores as UK banks prepare to release their own figures next month.
Goldman Sachs took 10 billion US dollars (£6.2 billion) from the US Treasury at the height of the financial crisis but has since paid the money back, with taxpayers earning 1.4 billion dollars (£865 million) on the investment.
In the UK, the bank is trying to rebuild its reputation after it was fined £17.5 million by the Financial Services Authority (FSA) for failing to tell the regulator that Goldman trader Fabrice Tourre was under investigation when he took a job at the bank's London office in 2008.
Goldman has recently been in the spotlight for its dealings with Facebook - the bank invested 500 million US dollars (£312 million) in the social networking giant.
The New York-based group said the drop in revenues compared with 2009 was driven by declines in the firm's underwriting business.
Chief executive Lloyd Blankfein said: "Market and economic conditions for much of 2010 were difficult, but the firm's performance benefited from the strength of our global client franchise and the focus and commitment of our people.
"Looking ahead, we are seeing signs of growth and more economic activity and we are well-positioned to help our clients expand their businesses, manage their risks and invest in the future."
In the UK, Goldman forked out 465 million US dollars (£291 million) in UK bank payroll tax - a one-off 50% tax on bonuses above £25,000.
But the large tax windfall was not enough to appease the unions, with TUC general secretary Brendan Barber calling for the UK Government to do more to tackle bonuses at the next G20 meeting.
He said: "Goldman Sachs has stuck two fingers up to austerity Britain by shelling out mega bonuses again. These earnings would make Gordon Gekko blush.
"Bankers are toasting their telephone digit bonuses while the rest of the country reels from more than a fifth of young people being out of work. This Government is overseeing a fast return to the worst excesses of the 1980s."
Goldman Sachs saw a 52% plunge in fourth-quarter earnings, compared with the same period a year earlier.
The bank posted earnings of 2.39 billion US dollars (£1.49 billion) in the three months to December 31, while group revenues in the fourth quarter declined by 10% to 8.64 billion US dollars (£5.39 billion).
The company said revenues in its investment banking arm dipped 10% in the fourth quarter as mergers and acquisitions declined compared with a year earlier, while underwriting business also fell.
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