Goldman Sachs hands staff pounds 3.5bn to its staff bonanza

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FROM MONDAY even the doormen at Goldman Sachs will own part of the company that employs them. The world's largest investment bank is sharing out 21 per cent of its equity - worth approximately pounds 3.5bn - between its employees when it goes public next week.

It is believed to be the first time a big financial institution has included support staff in such a bonanza. Some junior members of the multi- billion pound bank will be receiving shares worth tens of thousands of pounds.

"Short of a revolution, this is probably one of the biggest redistributions of wealth," said one insider yesterday.

Distribution, however, will be more equal for some than for others. While telephone operators and security guards are expecting windfalls as high as pounds 20,000, the company's partners will collect approximately pounds 30m each.

This week Goldman's 2,500 London staff were handed letters outlining exactly how much they will receive - based on a formula which will allocate approximately half their combined salary and bonuses with extra awards for long-term service and merit.

"The support staff are ecstatic. Some of them are going to double their salaries," said one worker.

There was little dancing in the street, however, outside the bank's office in Fleet Street in central London yesterday apart from one American trader, who boomed: "This is the greatest company of all time," as he strode down the road

If there were staff disgruntled about their share of the hand-out, they were unwilling to say so yesterday. "We have been told not to speak to the press. We are always told not to speak to the press," said one smartly-dressed woman as she left the building.

Goldman Sachs is expected to be valued at about pounds 15bn when it is floated on the New York stock exchange on Monday.

Half the shares are likely to go to its 221 partners while the remainder will be divided amongst 13,000 staff worldwide.

It is believed Henry Paulson, the chief executive, will receive approximately pounds 130m, with packages diminishing as they are distributed down the corporate ladder.

Partners are expecting an average of pounds 30m while a long-serving executive director, who took home pounds 200,000 in salary and bonuses last year, can expect the same again as his windfall.

A pounds 20,000 a year librarian who has been with the company since 1985 can expect pounds 22,000 while long-serving telephone operators will almost double their pounds 15,000 basic pay.

The bank is believed to have decided on the US-style equity share to employees, first announced a couple of weeks ago, because it has been shown to promote staff loyalty and commitment.

Certainly, anyone who jumps ship in favour of the competition within the next three years will lose out.

Employees will have to wait until 2002 before they can sell their shares though they will be able to swap a third for cash after a year. Senior staff face tighter restrictions up to five years.

"It is wonderful but in a way it is also like handcuffs - admittedly handcuffs many people would welcome," said one member of staff, adding: "Some people like the certainty and security of the shares but others will feel tied down."

Yesterday, observers were split on how they viewed the huge city bonuses.

One labourer emerging from the Goldman offices said: "They are glum faced in there. Too much money, too quickly - they don't know what it's like on the other side."

The wife of a former executive director, however, supported the windfalls: "They work like dogs - everyone from the secretaries upwards. There is no time off. They deserve it."