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Leading Investment Bank Cuts Partners Pay

Wed, 17 Dec 2008

Goldman Sachs employees may find themselves on a reduced pay packet this year as a result of the global credit crisis. The bank’s 400 partners all earned between $5 million and $20 million last year, but a number of partners could see their earnings cut to less than $1 million for 2008. The earnings forecasts follow an Goldman’s fourth quarter and full year results which reveal that the bank will pay out $10.9 billion in salaries, bonuses, benefits, taxes and other expenses this year - $500 million less than the company predicted in August.

Chief Financial Officer at Goldman Sachs, David Viniar, confirmed the bank’s partners’ pay would reflect the bank’s performance, in a year which has seen Goldman report its first quarterly loss in 10 years. Mr Viniar said, ‘This year our performance is down quite considerably from last year so our compensation will be down quite considerably from last year’. Mr Viniar also revealed that partners would receive a greater proportion of their pay as equity, to encourage an improvement in long term performance.

The cuts are expected to be nominal in relation to some other banks, with recruiters reporting that some banks are considering cuts of up to 75 per cent on its salary pay outs.
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