Goldman: Still the Home of the Bonus, Still Hiring
Goldman Sachs' reputation as a high-paying powerhouse didn't suffer very much in 2010, when the bank shelled out over $15 billion in total compensation and benefits. During the year, it also beefed up headcount despite revenue declines in some of its key investment banking divisions.
Compensation and benefits expenses were $15.38 billion for the year, a 5 percent drop from the $16.19 billion that Goldman posted in 2009. The ratio of compensation and benefits to net revenues for 2010 was 39.3 percent, one of the lowest in Goldman's history as a public company (though higher than the 35.8 percent ratio in 2009).
The average Goldman employee bonus is in the $430,000 range this year, down from an average payout of more than $490,000 in 2009. In part, the decline stems from Goldman's uptick in hiring. "We don't target a rate: We pay our people fairly based on their performance and the firm's performance," said CFO David Viniar in a conference call Wednesday morning.
Goldman's total staff at the end of 2010 was 35,700, up 10 percent from year-end 2009. Viniar said Goldman will continue to hire "in the mid-to-high single digits" during 2011.
Some key Goldman unit revenues were down for the year. Its prized fixed income, currency and commodities unit (FICC) posted a 37 percent drop in net revenues, while Investment banking fell 3 percent year-over-year. Market-making was down 38 percent compared with 2009, and equity underwriting was down 19 percent. Overall, Goldman's performance deteriorated sharply in the second half of 2010, with FICC posting a 48 percent drop in net revenue in Q4 compared with the same period in 2009.
In what some critics called a move to quell public criticism of its bonus levels, Goldman shifted $320 million out of its compensation pool to donate to a charity, Goldman Sachs Gives.