The real reasons Goldman felt compelled to give its partners extra stock in August

Like Credit Suisse, Goldman has felt compelled to make an additional mid-year bonus-style payment, which it is blaming on its rectitude in the 2009 bonus round.

For 2009, Goldman capped total compensation for its London partners at 1m per head, apparently in response to the UK bonus tax.

This allegedly left its partners vulnerable to being poached by better paying rivals. "We changed what we did but nobody else did," a 'source' told the Sunday Times. "This also shows that the bonus tax did not succeed in influencing behaviour in the City; our rivals kept on paying to hire the right people."

The August stock awards, said to be worth millions of pounds per London partner, but restricted for five years and subject to clawbacks, are being pitched as an attempt to remedy this.

However, Goldman's claims to a) be hard done by because no one else took much notice of the bonus tax and it did, and b) to have been obliged to award additional stock in August purely because of its bonus tax-related restraint, don't bear up to scrutiny.

Goldman paid WELL last year

In the first place, although Goldman restricted pay for its partners, it didn't bother much with the bonus tax when it came to paying everyone else. Goldman's tax payments - and therefore its bonuses - were higher than any other banks' for 2009.

Why August?

The decision to award the stock in August also looks a little fishy. Goldman lost several of its partners at the start of the year, particularly in Asia, but there were no notable UK exits in June or July. By August, most poaching has already taken place.

Instead, it's likely that the additional stock was awarded in August because....

1) Q2 results were dreadful Goldman's second quarter results, announced in July, would have confirmed to partners that 2010 is unlikely to be a great year for pay - quarter-on-quarter profits plunged 80% and the return on equity was less than 10% for the first time since the end of 2008. Anyone thinking about moving would have been spurred by the thought that there wasn't likely to be much to look forward to if they hung on for bonuses in January 2011.

2) The Abacus case was still a dark cloud By August, Goldman had settled the Abacus case, but its memory, and the suspicion that Goldman was being oppressed by the SEC, was fresh in the mind. Partners needed a little pick-me-up.

3) The stock was down Most importantly, Goldman's stock plummeted when Abacus came to light, and stayed down. Between April and July it fell nearly 19%, which is not good when you're a partner with a large stock holding.

Finally, it's worth noting that Goldman's London partners may have been struggling to survive on their 1m 2009 payout. In early 2009 it emerged that 25% of them were worth less than $5m following losses on their Goldman stock. In 2008 Goldman was rumoured to be offering them loans to help see them through. Awarding stock that's restricted for five years is unlikely to have alleviated the financial pain, but was at least a gesture.

The reality is that Goldman had plenty of reasons to award extra stock in August. The bonus tax and its repercussions was only one of them.