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Goldman Sachs, the City of London and Wall Street totem, will divvy up a $12.2bn (£7.9bn) pay and bonus pool among its staff, despite public and political anger and in the face of crumbling revenues and profits.
Even though the investment bank said it had cut its remuneration bill – salaries, bonuses and benefits – by more than a fifth, it still came out to about the size of the GDP of Albania and prompted an outcry from unions.
The figures were revealed alongside Goldman's 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 $4.4bn.
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 basic 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 $78m from its remuneration pool to fund Goldman Sachs Gives, its charitable organisation.
The bank has shed staff in some of its worst-hit operations and said it expected to save $1.4bn in annual costs once the cuts were fully implemented. It ended the year with 33,300 employees, 2,400 fewer than in 2010. It employs over 5,000 people in London.
The average remuneration for Goldman employees worked out to $367,057 – perhaps the most hotly anticipated single number to come out of the finance industry since the "Occupy" movements turned up the heat on banks. The figure this time last year was $430,700.
10 comments:
Let's here it for the Squid's full bonus act. No Squid left behind. There must be a planet where sociopathic squids live. I think they are aliens here to take over the world. Why is it that every government agency jumps to kill the aliens in the movies when they invade earth and yet with GS nothing happens? I think our government has been taken over by these squid beings who look just like people. Just like in "The Invasion of the Body Snatchers."
Way to go, Queen!
That movie scared the heck out of me when I was a kid. Unfortunately, what is going in the world is doing the same ;-)
From MAKING MONEY by Terry Pratchett:
"“I read somewhere that the coins represent a promise to hand over a dollar’s worth of gold,” said Moist helpfully.
Mr. Bent steepled his hands in front of his face and turned his eyes upward, as though praying.
“In theory, yes,” he said after a few moments. “I would prefer to say that it is a tacit understanding that we will honor our promise to exchange it for a dollar’s worth of gold, provided we are not, in point of fact, asked to.”
“So . . it’s really not a promise?”
“It certainly is, sir, in financial circles. It is, you see, about trust.”
“You mean, trust us, we’ve got a big expensive building?”
GAW says:
mugabe - HFT is an abusive practice that has nothing to do with a 'free market', it is just well funded insiders scalping off of others by being in the middle of every trade.
I am of the opinion that HFT should be totally banned, by having a period of 10 seconds before any trade can be canceled once it is displayed on the market order system.
Mugabe replies:
I don’t disagree with any of that. All I’m saying is that HFT does not distort medium and long term charts. It only makes trading impossible if your time frame is nanoseconds, too.
GAW further says:
If you read up on the details of how HFT works, they make their money by getting a fee or rebate from the market for providing "liquidity", which comes out of every other non-HFT traders pocket in the form of an added charge on your Exchange fee per trade. But they only provide "liquidity" when the weather is good, when the market has a problem they run away and hide - which is the cause of the 'flash crashes', as the HFT "providers" simply stop doing any trades when "unusual price action" is detected.
Mugabe counters:
They probably do run away and hide when the market has a problem. But the effect of this would be to increase spreads (and therefore less liquidity), not to make the markets crash itself. The biggest one day crash in recent history was in 1987, way before HFT.
Queenbee on HFT: I think that both of you have a point. The thing about HFT IMO is when they buy, they can move a stock up or down for no reason. Just as you have completed your order to buy or sell, they can suck your money right back out by going the other way in the blink of an eye. Kind of like getting hit by a truck and not getting the license plate. I am with GAW that HFT should be banned and a time limit placed on orders entered and cancelled.
Let's not forget the flash crash last year when anyone who had standing stops would have been triggered and then the computers just bought it all back at a discount.
Someone lit a fire under silver today. I took out my 10 ounce bars from the safe deposit box to sell and never did. I can get 320 per bar from GC, but I cannot justify the loss of 800 having bought them at 400 each. I wasn't actually going to sell them I wanted to trade with a local dealer for gold.
We have a new reader who is a numismatic collector and hope he comments when he has the time.
I am with GAW that HFT should be banned and a time limit placed on orders entered and cancelled.'
This a diffcult question as you're also limiting the freedom of anyone who makes a decision. What about someone who puts in a sell order when they want to make a buy? Or people who scalp for a living?
I have absolutely NO skin in this game. I never day trade but I don't think it's a clear issue.
I agree Mugabe there is no easy answer just opinions. I don't day trade either and I have to admit thinking it over again what does HFT add or subtract from the buy and hold trader long term? Anyone want to tackle that one? Are the HFTs only competing with each other when skimming profits?
Back to the thread is it OK for GS to operate in the way that they do? How can anyone make money every month and not have some sort of inside trading information? It just doesn't seem possible to me.
Also the Squid infiltrates the government with ex-employees or ex-government employees land cherry jobs with the Squid. Ergo one would assume the old saying scratch my back and I scratch yours.
Boeing did exactly that - but they got busted. Remember that mess over the Airborne Refuling Tankers?
A while back here on The Hive I wrote a post, about my Ukrainian friend who I call 'Crazy Tatiana?' She had called me out-of-the-blue, saying, "I HAVE to buy some Gold & Silver, now!" back when it was around $1,800/oz.
I had discussed PM's with her and her husband on and off for the past 5 years, and when I asked her "why buy right now?" she nearly bit my head off. So I shared with her what I know about PM's and suggested she make her own decisions.
Well, last weekend I visited them, and after asking for my advice she did just the opposite. She paid $3,000 each for some graded 1-oz Buffalos from some outfit that I have never even heard of.
Apparently she talked to some hot-shot salesperson who, detecting she was a novice, sold her something which nobody else was interested in.
When I told Crazy Tatiana that she paid too much, and that she doesn't need to buy numismatic-quality, graded bullion coins for an investment or to preserve the value of her money, she again asked me what should she buy. Exasperated, I told her when I make my next PM purchase I will let her know what I am buying, and she can then decide what she wants to do.
Also, when I visited, I brought along a peanut-butter jar filled with Morgan Dollars & Silver Halves. Kinda funny - when I talked about 'junk' Silver, she seemed to shun the idea; it appeared she was turned off by the word, 'junk.' This all just shows how dumb & gullible some people are, with respect to PM's.
If you ever 'convert' someone into a PM believer, do them a favor and warn them about some of the pitfalls in buying. Of course, they may ignore you as Crazy Tatiana did, but at least you will not feel like you sent someone across a minefield without a map.
-Mammoth
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