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Goldman Bonus Rumor: Dark Window on 2008?

A rumor that Goldman Sachs stiffed back-office staff on bonuses suggests Wall Street's troubles - and near-term career prospects - are even worse than they appear.

The rumor might be bogus. The New York Post, which first reported it, backed away after a London-based Goldman spokesman called the paper's story "nonsense" and said the bank "took great care to reward our people appropriately'' for "a very strong year." The Post Sunday business editor responsible for the story subsequently explained to Bloomberg, "That was a single item in a column that is a gossip column, which is distinct and very different from a news story.''

If accurate, the story is further evidence that managements view the back-office and IT professionals as interchangeable commodities wholly lacking in bargaining power. It's also a sobering reminder that discretionary bonus decisions are driven more by next year's outlook than last year's results - and 2008 may be looking ugly even in the eyes of Goldman Sachs.

According to the article in Sunday's New York Post, "cost center workers" who looked forward to bonuses of 75 percent of base, based on what they received for 2006, instead got only 15 percent.

The articles go on to contrast the rumored stiffing of Goldman's lower caste with the rewards lavished on its top three executives, the 23 percent jump in company-wide compensation expense for 2007, and the $661,500 average pay per employee.

As we've often pointed out, average pay per employee may be a useful statistic for analysts or shareholders concerned about a company's cost structure, but it's of little use as a reference point for candidates. The reason: Most of the total payout is concentrated within the upper layers of senior management and star producers.

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AUTHORAnonymous Insider Comment
  • if
    ifameya
    18 April 2008

    Too bad, where I work us Finance people want IT guys to come have lavish lunches and dinners with us, because our managers have it right. When something happens, IT drops everything and helps us out Finance before any other department. Like the saying goes, what goes around...comes around. You guys should come work for us.

  • GS
    GS Trader
    15 February 2008

    You Indian IT guys are always hovering around the trading desks to scoop up free food. Stop. If you want pizza, go buy it. Why do you need to scam it from people who ordered it for themselves. Honestly.

  • ex
    ex-Goldman credit analyst.
    22 January 2008

    Yes, sounds like Goldman. No surprise there.

  • As
    Ashish More
    13 January 2008

    Simply join asia and as such India in every revolution

  • do
    does it matter
    9 January 2008

    leeches are better than humans. the info is 100% correct, even middle office IT got bonuses starting from $2500 and up, we work hard and effeciently for such idiots, i suggest some good firm should hire all GS IT staff at once , then this company can be left sitting alone in the Wall Street Aisle.

    i have prayed to god this company suffers like lepers and never recovers.

    our manager has no attitude

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