Blankfein defends Goldman bonus scheme to avoid tax

Goldman Sachs chief executive, Lloyd Blankfein, yesterday defended the investment bank's controversial plans to defer bonuses to benefit from the looming cut in the top rate of income tax to 45p.

Mr Blankfein dropped the plans in the face of public criticism, but said people should not be blamed for responding to incentives in the tax system.

He told BBC Radio 4's Today programme: "I'm not saying that you are exculpated from any pressure merely because you meet the rule of law. We've never said that, we don't live that life.

"But I would say: 'are you going to hold people up to public opprobrium because a house they could have sold in January instead they sell in May because there was a profit to be made on that house because the selling price was higher than the purchase price?'.

"If you do that, you are going to criminalise every right-thinking person who organises his or her affairs in a sensible way. We are a public entity, we live on the goodwill of the public, and so we adapted to what we perceived as criticism. We stand by our original idea and we stand by the revision of our plans."

Goldman's bankers were paid $400,000 (£253,000) on average each last year, above $30,000 more than in 2011.

Results last week showed that the bank has set aside $13bn to cover the pay of its 32,400 employees although its share of revenues paid out in salaries dropped to 37.9 per cent.