Goldman Sachs bankers capped

Goldman Sachs' bonuses

The 100 most senior employees for Goldman Sachs in London will have their total pay capped at GBP£1 million when the Wall Street bank reveals its 2009 bonuses this week.

Less senior British employees who are awarded more than GBP£1 million for their work last year will have 60 percent of any amount over GBP£1 million paid in deferred stock, in line with Financial Services Authority (FSA) guidelines.

The move represents a "significant sacrifice of several hundred million pounds," according to the BBC.

Goldman Sachs will inform bankers of their individual pay packets over the coming week, the British paper The Times states.

Employment

Goldman Sachs, which is Wall Street's most successful bank, employs 5500 people in London. The bank said last Thursday that it had set aside US$16.2 billion (GBP£10 billion) for bonuses for 2009, well below the US$20.2 billion record of 2007.

Announcing a US$13.4 billion net profit for last year on net revenues of US$45 billion, only two percent lower than 2007, David Viniar, Goldman Sachs' finance director, said that the bank had shown "restraint" in awarding pay.

There are around 100 partners in London, all of whom will be paid no more than US$1 million for last year. All Goldman Sachs partners around the world will receive 60 percent of their bonuses in stock that will vest over the next three years but cannot be sold for five years.

Goldman Sachs had already said that its 30-person management committee, which includes Michael Sherwood, the bank's London-based vice-chairman, would receive their entire 2009 bonuses in stock.

Bonus tax

As well as the British bonus tax, Goldman Sachs and other banks face an American tax designed to raise as much as US$117 billion to cover the cost of the Obama Administration's bailout.

And in a UK attempt to restrain bank pay last year, the Chancellor, Alistair Darling, announced plans for a one-off 50 percent tax on bankers' bonuses as part of his pre-Budget report.

This weekend it emerged that British high street giant Barclays was likely to defer paying bonuses to its highest earning staff, the Press Association reports.

It all comes at a time when President Obama has pledged to overhaul the banking system in America, in the biggest overhaul since the 1930s.

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