Goldman Sachs cuts bonuses for junior bankers by up to 90%: Insiders

Goldman Sachs’ bonus week turned out to be a bust for already-shocked workers as some had their pay cut by as much as 90%, insiders told The Post.

Insiders said several junior bankers — who last year earned bonuses well into the six figures — learned on Wednesday they would only get $10,000 or $15,000 despite putting in 100 hours countless weeks.

The Wall Street giant raised the base salary for first years to $110,000 from $85,000 last year, while vice presidents bumped it up to $250,000 from $210,000.

But the insiders said those increases didn’t make up for the disappointing bonuses. Last year, the average analyst bonus was $95,000, while those at the VP level earned an average bonus of over $500,000.

The bonus issue comes just a week after Goldman cut 3,200 employees from its ranks. Since then, the sources add, the mood at the bank has been more bleak than usual.

Those who escaped the execution will not see the money hit their bank accounts until next week. After that, some Goldman insiders expect to see an exodus from the bank.

Reactions to frivolous bonuses ranged from anger from getting too little in rewards to hours of stress and exhaustion, disappointment and even anxiety about mortgage payments, employees told The Post.

David Solomon said, “We always strive to maintain a culture of pay-for-performance.”
AFP via Getty Images

“We all knew it was coming because of how much they cut back,” one worker told The Post Thursday. “But that doesn’t mean it makes it any easier.”

A Goldman spokesperson pointed out to The Post the comments the executives made on the company’s earnings call Tuesday.

“While compensation expenses are down 15% for the year…we always strive to maintain a culture of pay-for-performance,” CEO David Solomon said on Tuesday’s call. With lower revenues, the compensation was lower. However, we also recognize that we operate in a talent-driven company, and we must continue to invest in our people whose dedication is critical to our world-class franchise.”

This year’s “Corporate Talk Day,” as some are calling it, was accompanied by an awkward conversation in which managers read to employees from a text provided by Human Resources intended to help the Goldmanites “understand … the current financial constraints the company faces in the market environment we are in.”

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

On the company’s earnings call Tuesday, Chief Financial Officer Dennis Coleman noted that total compensation was down 15% — but because headcount was up 10%, there was less money involved. Coleman also noted that the 15% drop was less than $2.5 billion, making this drop a “meaningful number.”

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Goldman Sachs laid off 3,200 employees last week.
Getty Images

To make matters worse, the low bonuses come weeks before Goldman partners from around the world descend on Miami for the company’s annual partners retreat, where the company’s top figures plot strategy for the coming year. Between plane tickets, hotel rooms and meals can cost millions.

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

Another person in the know said that this year will be a “downsizing event” compared to previous years.

While employees will have a sense of whether or not it’s going to be a good year when it comes to bonuses, banks often keep people guessing until the big reveal.

Alan Johnson, president of compensation advisory firm Johnson Associates, told The Post that companies usually avoid giving out too many details ahead of bonus season.

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

For employees, that can make financial planning—like where to live or getting roommates—extremely difficult.

“They are very vague and don’t give anything in terms of ballpark estimates,” said a source.

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Goldman Sachs laid off thousands of workers in a mass layoff last week.
Bloomberg via Getty Images

Johnson said it’s a risky decision for any company when it comes to the distribution of compensation.

“Banks is about how dangerous it is to lose someone,” Johnson said. “You need to know the people you should be the least unhappy with…and you want the underperformers to be the most unhappy.”

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