Goldman may actually be a bit stingy this year

Goldman Sachs has received a lot of negative press over the fact that it's likely to pay out record bonuses this year, a fact it seems relatively unconcerned by.

A look at first half results shows that it has indeed accrued the biggest bonus pot among its US investment banking peers, but this might not be sustained for the rest of the year.

A note released yesterday by analysts at Pali Capital, upgrading Goldman's shares from 'neutral' to 'buy', pegs compensation as one of the factors for its revision:

Political pressure around compensation may force GS to pay lower than normal levels. GS typically accrues compensation at a 48-49% rate through the first three quarters of the year. The Q4 compensation ratio is usually 25-30% below the average for the first three quarters. Given political pressure, we believe the Q4 rate has the potential to be 40-50% lower this year.

This, of course, echoes a similar sentiment voiced by Rochdale Research analyst Dick Bove, who suggested that accruing such massive levels of compensation in the first two quarters may simply be an accounting device.