GOLDMAN Sachs will cap bonuses for its top London bankers at £1m.
Details of the clampdown have not been officially released but a source close to Goldman confirmed the story last night. The news will anger top deal makers at the bank, whose compensation packages have in the past topped £10m.
Senior bankers will receive details of their remuneration later this week. This has varied from previous years when Goldman staff were told about their compensation packages two days before the bank’s final quarter results are released.
Goldman’s capitulation to government pressure over bonuses came as a surprise. It announced a bonus pool of $16bn (£10bn) – far less than the $22bn that had been expected. Its ratio of compensation to revenue plummeted from 48 per cent in 2008 to 35.8 per cent. Net revenues in 2009 were just two per cent lower than the firm’s record net revenues in 2007 but compensation was 20 per cent down.
It also attempted to subdue public anger over compensation packages by skimming $500m from the pay of their 400 senior partners to donate to the bank’s charitable arm, Goldman Sachs Gives. Over 5,500 of Goldman’s 32,500 staff are eligible for the 50 per cent levy on bankers’ bonuses of more than £25,000.