Even the gofer gets rich as the workers get their share of Goldman's golden windfall

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The Independent Online
THE SENIOR partners of the world's most profitable investment bank -including a number of senior City figures, one of them a former Labour party adviser - were yesterday patting themselves on the back for their constructive, democratic and egalitarian decision to pay themselves up to pounds 100m each.

The joint statement by the company's chairmen said: "This decision was reached after lengthy open and intensive dialogue in the best tradition of Goldman Sachs."

Certainly even Sachs the low paid in Goldman Sachs (which should not be confused with the normal usage of the phrase) will get a share of the windfall. Junior partners are expected to get shares worth around pounds 50m, while partners who have been there six years or more may get holdings worth as much as pounds 100m.

Goldman Sachs, stung by comment that it was returning to the 1980s ethos of corporate greed, said it aimed to dole out the benefits of the float "more broadly" among employees, but gave no details.

It's a matter of definition as to how "open" the debate was. Security guards patrolled the conference centre where the decision was made and a police car blocked the entrance.

Goldman Sachs conforms to the Wall Street stereotype writ large. One week's annual leave is the norm for a graduate trainee, as is global travel at an hour's notice; offices are deliberately understaffed so that people work harder and the bonuses are bigger; relationships are fraught - it is a Goldman Sachs joke that employees learn how to conceive by fax, as this is the only form of communication many of them have with their wives.

But we are not just talking about workaholic New Yorkers here. Some partners are British, based over here, and, on the surface at least, hardly of a Wall Street ideology.

Most notably, Gavyn Davies, the company's chief economist, was an adviser to the Labour administrations of Harold Wilson and Jim Callaghan, and his wife Sue Nye runs Gordon Brown's private office.

Nor does it encourage interest in one of its senior staff. A spokesman for the bank said yesterday that Mr Davies would not be commenting on the decision and added: "You would not expect him to after the way that he has had his good name dragged through the mud by the British press."

The dragging through the mud would appear to consist of giving Mr Davies's job and the sum of money he is likely to collect.

The meeting that changed the lives of the 190 Goldman partners took place at the IBM Palisades Executive Conference Centre in New York state. It was fine setting for making a fortune. White-tailed deer roamed outside the hilltop complex, 20 miles north-west of Manhattan. The parking lot was filled with Mercedes-Benz and BMWs and one $140,000 dark-green Ferrari. For the chauffeur-driven, a fleet of Lincoln Town Cars arrived.

The centre had security more suited to a G8 summit. Goldman Sachs ordered that all entrances be closed and hired additional guards to patrol the grounds.

Though cynics might not credit it, there were arguments against taking the money during the meeting. Those partners who opposed the plan to float suspected that Goldman Sachs' famous culture of staff loyalty, dedication and adherence to pure business principles would be compromised by any change in the financial basis of the firm. In a high-finance version of the British argument over the value of retaining building society status rather than becoming a clearing house, some partners expressed the fear that the Goldman ethos would be adulterated.

At the end of the debate, all the partners were given a survey form to fill in. This was not a ballot, insiders stress, although it was secret. The form set out a series of choices for partners, including, of course, the question of whether they favoured flotation.

The super-wealthy chiefs


Former economics adviser to Jim Callaghan and Harold Wilson, Davies could be up to pounds 100m richer. Steeped in Labour politics - his wife, Sue Nye, runs Gordon Brown's private office. They already have a country home, the "Building of the Year" award-winning Baggy House in Devon by architect Anthony Hudson. So what can the man who has everything buy? Well, Davies is an avid supporter of Southampton FC and could now buy the Premier league team twice over.


The old-Etonian former chairman of Dresdner Kleinwort Benson joined Goldman's last year - some 30 years after he spent a nine-month secondment at the bank as a young financier. He left Kleinwort after a row with the new owners, German bank Dresdner. A keen skier and lover of Tuscany, the father-of-three was known as the "man of many places" because he was always travelling. He is set to make pounds 50m.


Chairman of Goldman Sachs' Asian operations and a leading member of the bank's anti-floatation faction, can look forward to a stake worth pounds 100m. The New Yorker, 43, is also chairman of Laura Ashley and was named as Britain's 27th most powerful person in the Daily Mirror's 1994 poll. Born to prosperous lawyer parents, he spent two years at St John's College Oxford, leaving to join Goldman Sachs in 1979.


The chairman of Goldman Sachs International, can expect shares of up to pounds 50m. The father-of-three, with homes in London and Dublin, trained as a barrister after leaving the Jesuit Gonzaga College in Dublin. Mr Sutherland, 52, was Irish attorney-general at 35. A director-general of Gatt and the World Trade Organisation, he resigned in 1995 to spend more time with his family. Sutherland is also chairman of BP.

"It didn't seem like much of a job when I joined. No one says `please' or `thank you'. They just wave a note to take to some bank, except it'll say `two pizzas, extra mozzarella'. And it only pays pounds 12,000. Then yesterday this guy comes on the tannoy and says all staff will `share ownership'. One of those yuppies pats me on the back and says `Prepare to be rich my boy'. I'll believe it when I see it."