Goldman Sachs bankers in £13bn pay bonanza after stellar year of deal-making
Bankers at Goldman Sachs saw their pay boosted by a third last year – with the top rainmakers scooping multi-million pound bonuses.
The Wall Street giant’s 43,900 staff were handed a total of £13billion, up 33 per cent on 2020 after a stellar year of deal-making.
That equated to an average of £296,000 each – but it masks the fact that the top performers will have bagged eye-watering sums.
Goldman Sachs 43,900 staff were handed a total of £13bn, up 33% on 2020 after a stellar year of deal-making
Some bankers who advised on lucrative deals were expecting their pay packages to jump by as much as 50 per cent.
The long-awaited bonus day, which perennially leaves the best-rewarded bankers gleeful and others in misery, came as Goldman announced record full-year revenues of £43.7billion, a figure that was up by 33 per cent on 2020. Profits of £15.9billion were more than double 2020’s figure.
The lender was boosted by its investment bank, which advised on a swathe of blockbuster mergers and acquisitions (M&A) as the pandemic prompted a wave of deal-making.
These included the Advent International-backed takeover of Britain’s Ultra Electronics by rival Cobham, and Clayton Dubilier & Rice’s purchase of supermarket Morrisons.
Fees from advising on M&A, initial public offerings and debt deals climbed by 45pc to £2.8billion.
But Goldman’s knock-out full-year results for 2021 were overshadowed by a disappointing fourth quarter.
The bank undershot expectations in the last three months of the year, as the pandemic plundering began to tail off.
Goldman’s share price was down almost 7 per cent in New York.
Danni Hewson, financial analyst at AJ Bell, said: ‘Expectations were high off the back of last year’s boom in trading, and matching that has proved impossible.
‘Add in increased expenses and the need to shell out more to retain and attract talent, and the banking sector as a whole might be on track to dissatisfy 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 labour environment.’
Rising interest rates could help lenders out over the next year, Hewson said, as banks tend to be able to make more money by increasing charges on borrowers but paying savers less when rates are high.
But they may still struggle to repeat the bumper advisory fees that they made this year, she added.
David Solomon, the Goldman Sachs chief executive who has been known to DJ under the name DJ D-Sol, was hopeful for the year ahead.
He acknowledged that 2021 was an unusual year, but added: ‘Activity levels, given we’re in a very unusual macro environment, are going to continue to be reasonable as we start into this year.
‘You’ve still got a lot of volatility around the pandemic.’