Bonus row to flare up again

THE row over bonuses for investment bankers is due to be reignited this week, as Goldman Sachs prepares to announce a huge layout on pay, expected to be almost double the figure allocated last year.<br /><br />The Wall Street investment bank unveils third quarter profits on Thursday, with analysts predicting pre-tax profits of $3.5bn (&pound;2.2bn) for the three months to 30 September.<br /><br />About $6bn of an expected $12bn in revenues has been earmarked for the bank&rsquo;s compensation pool, which is expected to total around $22bn by the end of the year, due largely to stellar performance in fixed income.<br /><br />By contrast, last year&rsquo;s third quarter saw the bank set aside just $2.9bn for compensation, while its full year pay pool totalled $10.3bn.<br /><br />The remuneration plans would see Goldman bankers, 5,500 of whom work in London, take home an average compensation package of $748,000, well above the average $363,000 seen last year.<br /><br />Bankers at JPMorgan Chase are also likely to see their pay hiked, with the bank forecast to increase revenues by 68 per cent to $24.8bn in the third quarter, compared to last year.<br /><br />Both Citigroup and Bank of America however, are expected to report third quarter losses on modestly improved revenues.<br /><br />With the bonus row set to reappear, financial services minister Lord Myners has summoned the heads of investment banks with London-based subsidiaries to see him.<br /><br />Myners hopes for an agreement from the executives ensuring bonuses are in line with a communiqu&eacute; issued after last month&rsquo;s G20 in Pittsburgh. It would be similar to a deal chancellor Alistair Darling struck with high street banks.