Goldman Sachs cuts bonuses for junior bankers by as much as 90%: insiders

The bonus week at Goldman Sachs has been a disaster for already shell-shocked workers, with pay cuts by as much as 90% for some of them, insiders told The Post.

Many young bankers who received six-figure bonuses last year learned on Wednesday that they would only receive $10,000 or $15,000 despite countless 100-hour workweeks, insiders said.

The Wall Street titan raised base pay for early years to $110,000 from $85,000 last year, while vice presidents were raised to $250,000 from $210,000.

However, according to insiders, these raises did not make up for the disappointing bonuses. Last year, the average analyst bonus was $95,000, while VPs received an average bonus of over $500,000.

The bonus bummer came just a week after Goldman laid off 3,200 employees. The mood at the bank, the sources add, has since been even gloomier than usual.

Those who survived the cull won’t see the money in their bank accounts until next week. After that, some Goldman insiders expect a mass exit from the bank.

Reactions to paltry bonuses have ranged from anger at receiving very little reward for hours of stress and exhaustion, to frustration and even worry about paying off mortgages, staffers told The Post.

“We all knew this was coming because they are cutting costs,” one worker told The Post on Thursday. But that doesn’t mean it gets easier.

A spokesman for Goldman pointed out to The Post executives’ comments made during a call on the company’s earnings and losses on Tuesday.

“While compensatory spending is down 15% year-on-year…We are always committed to maintaining a pay-for-performance culture,” Chief Executive David Solomon said Tuesday. “With a decrease in income, compensation was lower. However, we also recognize that we are in a talent-driven business and we must continue to invest in our people, whose dedication is critical to our world-class franchise.”

This year’s “Company Talk Day,” as some are calling it, featured an awkward conversation during which managers read employees a script provided by Human Resources, which was intended to help Goldman supporters “understand…the ongoing financial difficulties that the firm faces in the market. the environment in which we are.”

Bonuses are a reflection of the overall performance of the bank. Last week, the bank reported a 66% year-over-year drop in profits and a 16% drop in revenue compared to 2021.

During the company’s earnings announcement on Tuesday, CFO Denis Coleman noted that overall compensation was down 15%, but with headcount up 10%, there was less cash. Coleman also noted that the 15 percent decline was more than $2.5 billion less, making the decline a “significant number.”

On top of that, low bonuses are paid out weeks before Goldman partners from around the world arrive in Miami for the firm’s annual partner retreat, where the company’s bigwigs consider strategy for the coming year. Between plane tickets, hotel rooms, and food, a junket can cost millions.

“Don’t even get me started,” said one frustrated employee.

Another person with knowledge said that this year there will be a “smaller event” compared to previous years.

While employees will have an idea of ​​whether the year is going to be good or not, when it comes to bonuses, banks often keep people guessing up to and including a major disclosure.

Alan Johnson, head of compensation consultancy Johnson Associates, told The Post that firms usually don’t give too much detail ahead of bonus season.

“Firms try to send general messages but avoid specific numbers because you don’t want people to know that level of detail about other people’s rewards.”

For employees, this can make financial planning difficult, such as where to live or get roommates.

“They are so cryptic and never provide any ballpark estimates,” the source said.

This is an important decision for any firm when it comes to compensation, Johnson said.

“Banks are beating around the bush about how big the risk of losing a person is,” Johnson said. “You need to figure out what kind of people you need to be the least miserable… and you want bad performers to be the most miserable.”