On first blush, a new study confirms what many on Wall Street have long thought: Goldman Sachs pays a lot more than other investment banks. But once you get into the numbers, you find that may only happen at the top.
Earlier this week, Bloomberg suggested the average employee at Goldman will receive a bonus of $397,707 this year, $187,000 more than their counterparts at Lehman Brothers and more than twice as much as bankers at Morgan Stanley and Merrill Lynch.
Unfortunately, it appears Goldman's generosity doesn't benefit all employees equally. One former staffer turned headhunter says the bonus pool's bulk is reserved for managing directors and partners. They receive around 40 percent of the total. He says the remainder of Goldman'ss staff receives slightly more than the industry average, but nowhere near double.
"For associates, vice presidents and executive directors, pay is roughly comparable," this headhunter says. "You only start to see the really big payouts when you make managing director or partner."
This was confirmed by headhunters in London. "It's crazy to say that associates, vice presidents and directors at Goldman are paid twice as much as anyone else," says one. "At the vice president level they pay more than most other banks, but not much more than 10 percent more. Morgan Stanley and Merrill paid roughly the same last year."
Bloomberg arrived at its figures by examining the total proportion of revenues banks have paid out in compensation over the past five years. The news service then estimated revenues for this fiscal year and extrapolated total compensation on that basis. Bonuses were assumed at 60 per cent of the compensation total. The average predicted salaries and bonuses:
- Goldman Sachs: Bonus: $397,707; Salary: $261,239
- Morgan Stanley: Bonus: $154,556; Salary: $103,038
- Merrill Lynch: Bonus: $174,683; Salary: $116,456
- Lehman Brothers: Bonus: $210,696; Salary: $140,464
- Bear Stearns: Bonus: $203,077; Salary: $135,385