TIMES ONLINE: Goldman Sachs has announced it will pay its bankers a share of $5.5 billion (£3.5 billion) for three months work just hours after the Financial Services Authority launched a formal investigation into the US bank.
Staff will receive average compensation of $166,000 each for the first quarter of 2010 after the bank beat expectations with a $3.5 billion net profit.
Goldman Sachs has seen $10 billion wiped from its market value since the Securities and Exchange Commission launched a $1 billion lawsuit against the bank, alleging the bank and one of its vice presidents, Fabrice Tourre, committed securities fraud.
Today, Britain’s FSA said that it has decided to start a “formal enforcement investigation” into Goldman Sachs International, its London-based business, after an initial review of the US case.
The bankers’ payouts beat the start of last year, when average remuneration for the first quarter was $149,000. However, this quarter’s pay is still considerably below the $226,000 allocated to each worker in the first quarter of bank’s record year of 2007.
The amount Goldman put aside for pay this quarter is equivalent to 43 per cent of its $12.8 billion net revenue, the lowest first-quarter compensation ratio in the bank’s history.
In a statement today, Goldman’s chairman and chief executive Lloyd Blankfein alluded to the scandal surrounding the bank. Even before Friday’s shock charges, Goldman had already been criticised for accepting a $10 billion state bailout then paying out billions of dollars in bonuses to its employees.
Mr Blankfein said: “In light of recent events involving the firm, we appreciate the support of our clients and shareholders and the dedication and commitment of our people”. >>> Christine Seib | Tuesday, April 20, 2010
