Goldman pays out £9.6bn in bonuses

STAFF at Wall Street giant Goldman Sachs earned a total of $15.4 billion (£9.6 billion) in pay and bonuses last year, equivalent to about £270,000 per employee.

Brushing aside continuing criticism in America of the banking industry's part in triggering the last recession, the share of Goldman's revenues splashed out in remuneration jumped to 39.3 per cent in 2010.

That compared with 35.8 per cent in the previous year, although the total figure paid out for last year, including bonuses, was 5 per cent down on 2009.

It came as the investment bank, which employs some 6,000 in the UK who are all eligible for performance-related bonuses, unveiled a 38 per cent drop in net profit to $8.35bn last year. This was on the back of a 13 per cent decline in revenues to $39.16bn.

Goldman took $10bn from the US Treasury at the height of the financial crisis but has since paid the money back, with American taxpayers making a $1.4bn "profit" on the investment. In the UK, the group forked out 291 million in 2010 in UK bank payroll tax - a one-off 50 per cent levy on bonuses above 25,000.

The latest investment banking largesse to its highly-paid "rainmakers" came the day after Europe's top financial regulator Michel Garnier, the EU's internal markets commissioner, called for banks to show bonus restraint. "Banks need morality or ethics, which would imply moderation in bonuses," Barnier said.

Goldman's payout prompted TUC general secretary Brendan Barber to yesterday call on the UK government to do more to tackle bonuses at the next G20 meeting. Barber said: "Goldman Sachs has stuck two fingers up to austerity Britain by shelling out mega bonuses again."

The US bank, whose critics brand it the "vampire squid", was in the spotlight recently when it paid almost $500m for a 0.5 per cent stake in the privately-owned electronic social network, Facebook.

The bank's earnings plunged 52 per cent to $2.39bn in the three months to end-December as Q4 revenues fell 10 per cent to $8.64bn. It blamed a decline in both investment banking and underwriting business.

Lloyd Blanfein, chief executive of the bank, said market and economic conditions for much of 2010 were "difficult".

Blanfein added: "Looking ahead, we are seeing signs of growth and more economic activity and we are well-positioned to help our clients expand their businesses, manage their risks and invest in the future."

Bond trading revenue, including commodities and currencies, slid 39 per cent from the third quarter as worries about European sovereign debt and rising US Treasury yields kept investors on the sidelines.

David Viniar, Goldman's chief financial officer, said "things were just dead" in December, although trading had been a lot more active in January."What we need really is conviction on the part of our customers and clients," Viniar added.

The slide in Q4 revenues at the group comes after big rivals Citigroup and JPMorgan Chase reported declines of 58 per cent and 8 per cent respectively.

Simon Maughan, broking analyst at London-based MF Global, said: "If Goldman Sachs can't show a strong performance, then good luck to anyone else trying."