Goldman Sachs bankers in £13bn pay bonanza after great year
Goldman Sachs bankers in £13bn pay bonanza after a great year of dealmaking
Bankers at Goldman Sachs saw their pay rise by a third last year, with the top rainmakers taking in bonuses of millions of pounds.
The Wall Street giant’s 43,900 employees received a total of £13 billion, up 33 percent from 2020 after a stellar year of deals.
That works out to an average of £296,000 each, but it masks the fact that the top performers have collected eye-watering sums.
Goldman Sachs 43,900 employees received a total of £13 billion, a 33% increase from 2020 after a great year of closing deals
Some bankers advising on lucrative deals expected their pay package to rise by as much as 50 percent.
The much-anticipated bonus day, forever making the highest-paid bankers happy and others in misery, came as Goldman announced record annual revenue of £43.7 billion, a figure 33 percent higher than in 2020. Profits of £15.9 billion were more than double of 2020.
The lender was boosted by its investment bank, which advised on a series of blockbuster mergers and acquisitions (M&A) as the pandemic sparked a wave of deals.
These include the Advent International-backed acquisition of UK-based Ultra Electronics by rival Cobham, and Clayton Dubilier & Rice’s purchase of supermarket Morrisons.
Fees for advice on mergers and acquisitions, IPOs and debt transactions rose 45 percent to £2.8 billion.
But Goldman’s knockout annual results for 2021 were overshadowed by a disappointing fourth quarter.
The bank dashed expectations in the final three months of the year, as pandemic looting began to ease.
Goldman’s stock price fell nearly 7 percent in New York.
Danni Hewson, financial analyst at AJ Bell, said: “Expectations were high after last year’s boom in trading, and it has proved impossible to match.
“Add to that higher costs and the need to spend more money to retain and attract talent, and the banking industry as a whole could be on track to be unsatisfied this earnings season.”
Goldman’s chief financial officer Denis Coleman said, “Our philosophy remains to pay for performance, and we are committed to rewarding top talent in a competitive work environment.”
Rising interest rates could help lenders in the coming year, Hewson said, because banks tend to make more money by raising costs for borrowers, but pay savers less when rates are high.
But they may still struggle to replicate the bumper consulting fees they incurred this year, she added.
David Solomon, the CEO of Goldman Sachs who is known as DJ by the name DJ D-Sol, was hopeful for the year ahead.
He acknowledged that 2021 was an unusual year, but added: “Activity levels, given that we are in a very unusual macro environment, will remain reasonable as we start this year.
“You still have a lot of volatility around the pandemic.”