Fresh row over bonuses at Goldman Sachs

Top Goldman Sachs London staff are in line for huge bonuses. Picture: Getty Images
Top Goldman Sachs London staff are in line for huge bonuses. Picture: Getty Images
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Top City bankers have been paid an average of £1.3 million – but the payouts are dwarfed by an average of £3m paid out to 121 high-flyers at the London office of US investment banking giant Goldman Sachs.

The pay for bosses and traders at Goldman – memorably described in 2009 by an American journalist as being a “giant vampire squid wrapped around the face of humanity” in its pursuit of money – are for 2013.

At nearly £60,000 a week, the individual sum equates to more than 120 times the average UK wage. Goldman’s average payouts compared with £1.4m at Barclays and £600,000 at taxpayer-backed Royal Bank of Scotland (RBS).

Frances O’Grady, TUC general secretary, said: “Risk-taking banks caused the global crash, yet while pay for the many has fallen every year since 2008, top bankers are still raking it in. It’s time their pay came out of the stratosphere and back to Planet Earth. Let’s make 2015 the year in which employees get a voice on remuneration committees.”

A spokesman for the Robin Hood tax campaign said: “Even in a financial sector with grossly inflated pay, Goldman Sachs manages to shock with what it gives its top brass.”

The data for the wider City largesse was compiled by information group Reuters, and showed that, overall, 2,600 City employees were paid more than £3.4bn in 2013.

It covered 13 banks, but did not include 2014, when employees have been affected by the new European Union cap on bonuses, which limits payouts to one times salary, or two times salary with shareholder approval.

International banks have controversially introduced “role-based allowances” to stop their top bankers losing out or defecting to rivals because of the bonus caps.

It has emerged that RBS chief executive Ross ­McEwan is set to receive such an allowance, in the form of a £1m shares windfall for 2015, but with payment spread over five years. The payment in effect doubles McEwan’s basic salary of £1m.

When he took over from Stephen Hester at the helm of RBS in the autumn of 2013, ­McEwan ruled out taking any bonus in the first two years of his tenure to avoid controversy so that he could focus on improving the state-backed bank’s performance for customers.

One City headhunter said yesterday: “It was highly predictable that banks would seek to get around the EU bonus cap by inflating either the basic salary of their profit ‘rainmakers’, or by introducing financial devices such as these non-bonus ­allowances.

“It may be against the spirit of the EU rules, but as long as it is not breaking any laws, the banks will live with it.”