Bonus week at Goldman Sachs turned out to be a bust for already shell-shocked staff as payouts for some were slashed by as much as 90%, insiders told The Post.
Many junior bankers — who last 12 months raked in bonuses well into the six figures — learned Wednesday they’d receive just $10,000 or $15,000 despite putting in countless 100-hour weeks, insiders said.
The Wall Street titan had raised base pay for first years to $110,000 from $85,000 last 12 months, while vice presidents were bumped as much as $250,000 from $210,000.
Nevertheless, those raises didn’t make up for the disappointing bonuses, insiders said. Last 12 months, the common analyst bonus was $95,000, while those on the vice chairman level got a median bonus of greater than $500,000.
The bonus bummer comes just per week after Goldman cut 3,200 employees from its ranks. The mood on the bank, sources add, has been much more bleak than usual since then.
Those that survived the culling won’t see the money hit their bank accounts until next week. After that, some Goldman insiders expect to see a mass exodus from the bank.
The reactions to the paltry bonuses ranged from anger at getting little or no reward for hours of stress and exhaustion, to disappointment and even anxiety about making mortgage payments, employees told The Post.
David Solomon said, “We all the time strive to take care of a pay-for-performance culture.”AFP via Getty Images
“All of us knew it was coming due to how much they’re cutting back,” one employee told The Post on Thursday. “However it doesn’t mean it makes it easier.”
A Goldman spokesperson pointed The Post to comments executives made in the corporate’s earnings call Tuesday.
“While compensation expenses were down 15% for the 12 months… We all the time strive to take care of a pay-for-performance culture,” chief executive David Solomon said on Tuesday’s call. “With revenues down, compensation was lower. That said, we also recognize that we operate in a talent-driven business, and we must proceed to take a position in our people whose dedication is critical to our world-class franchise.”
This 12 months’s “comp talk day,” as some call it, was accompanied by an ungainly conversation as managers read to employees from a script provided by Human Resources that aimed to assist Goldmanites “understand … the present financial constraints the firm is under available in the market environment we’re in.”
Bonuses are a mirrored image of the general performance of a bank. Last week, the bank reported profits 66% lower year-over-year and revenue that was down 16% compared with 2021.
On the corporate’s earnings call Tuesday, Chief Financial Officer Denis Coleman noted overall compensation was down 15% — but given headcount was up 10%, there was less money to go around. Coleman also noted the 15% decline was over $2.5 billion less, making the decrease a “meaningful number.”
Goldman Sachs cut 3,200 employees last week.Getty Images
Adding insult to injury, the low bonuses come weeks before Goldman partners from across the globe descend on Miami for the firm’s annual partners retreat, where company bigwigs plot strategy for the subsequent 12 months. Between the plane tickets, the hotel rooms and the meals the junket can cost thousands and thousands.
“Don’t even get me began,” one frustrated worker said.
One other person with knowledge said this 12 months can be a “scaled-back event” in comparison with years prior.
While employees can have a way of whether it’s going to be a great 12 months or not with regards to bonuses, banks often keep people guessing right up until the large reveal.
Head of compensation consulting firm Johnson Associates Alan Johnson told The Post firms typically avoid giving too many specifics ahead of bonus season.
“Firms try to send general messages but avoid putting out specifics numbers since you don’t want people to know that level of detail about other people’s compensation.”
For workers, that could make financial planning — like where to live or whether to get roommates — extremely difficult.
“They’re so cryptic and never provide anything when it comes to ballpark estimates,” a source said.
Goldman Sachs cut 1000’s of staff in a large layoff last week.Bloomberg via Getty Images
It’s a high-stakes decision for any firm with regards to doling out compensation, Johnson said.
“Banks go around and around about how much of a risk is it to lose an individual,” Johnson said. “You’ll want to work out the people it’s good to have be the least unhappy… and you wish poor performers to be probably the most unhappy.”
