Goldman Sachs sets aside $3.8bn for pay and bonuses

Goldman Sachs sets aside $3.8bn for pay and bonuses

US investment bank Goldman Sachs today revealed it earmarked another $3.8bn (€2.94bn) for its annual staff pay and bonus pool.

The second quarter haul means 34,100 workers - including 5,500 staff in the UK - are now in line for an average $273,000 (€211,742) each so far this year after Goldman had already set aside $5.5bn (€4.26bn) in the first three months of the year.

Goldman also said it forked out $600m (€465.3m) under the UK's one-off bonus tax scheme for windfalls handed out earlier this year.

But the second quarter staff pay and bonus bill - which includes salaries, estimated performance-related payouts and payroll expenses - is sharply lower than the previous three months after trading revenues plunged 39%.

The banking giant saw second quarter earnings drop 83% after the fall in returns, while it was also hit by a recent $550m (€426.56m) fine under a record legal settlement with US regulators.

Its results were worse-than-expected and combined with disappointing figures from IT group IBM to send Wall Street shares sharply lower.

Other US banks have already revealed similar second quarter pain, with JPMorgan Chase and Bank of America Merrill Lynch also impacted by the spring plunge in the stock market.

Goldman posted net income of $453m (€351.3m) against $2.72bn (€2.1bn) a year earlier.

The New York-based group, considered one of the strongest investment banks, saw trading revenue drop to $6.55bn (€5.1bn) in the three months to the end of June from $10.3bn (€8bn) a year earlier.

Goldman historically has had strong revenue from its fixed income, currency and commodities trading business that has exceeded market forecasts.

But those revenues slipped amid market volatility in the second quarter, which followed a remarkable recovery last year from the sector in the wake of the financial crisis.

With the added market turbulence, Goldman's corporate customers were also issuing fewer bonds and shares of stock, which knocked its investment banking business during the quarter. Revenue in that unit fell 36% to $917m (€711.21m).

The group's woes have been compounded by the hefty settlement paid to the Securities and Exchange Commission after the regulator accused it of defrauding investors over sub-prime mortgage-backed securities.

More in this Section

Free trade agreement ‘very difficult if UK does not comply with EU standards’Free trade agreement ‘very difficult if UK does not comply with EU standards’

Microsoft pledges to remove entire historical carbon footprint by 2050Microsoft pledges to remove entire historical carbon footprint by 2050

''Politically-sensitive'' costs of rents and health insurance rise''Politically-sensitive'' costs of rents and health insurance rise

C&C shares sink on news of CEO exitC&C shares sink on news of CEO exit


Lifestyle

Bryan Stevenson is the American civil rights lawyer who provided the inspiration for the newly-released film Just Mercy. Esther McCarthy spoke to him in IrelandReal-life lawyer Bryan Stevenson on inspiring Just Mercy

So I’ve booked my holidays. And before you ask, yes, I’m basing it around food and wine. I’ll report back in July, but I thought readers might be interested in my plan should you be thinking about a similar holiday.Wines to pick up on a trip to France

Esther N McCarthy is on a roll for the new year with sustainable solutions, cool citruses and vintage vibes.Wish List: Sustainable solutions, cool citruses and vintage vibes

They have absolutely nothing really to do with Jerusalem or indeed with any type of artichoke, so what exactly are these curious little tubers?Currabinny Cooks: Exploring the versatility of Jerusalem artichokes

More From The Irish Examiner