Tuesday's headlines: Goldman Cuts Comps as Earnings Slump
While this may be bad news for bankers, Occupy Wall Streeters may be tickled that Goldman Sachs has slashed its compensation budget by 24 percent to $10 billion, or $292,836 for each of the company's 34,200 workers during the first three quarters of this year, according to
The news follows a weak quarterly earnings report, as DealBook wrote that the bank reported a loss of $428 million, compared with a $1.7 billion profit a year ago, weighed down by private equity and global economic woes.
Things don't look good moving forward. Bloomberg continues:
Goldman Sachs, which set a Wall Street pay record for a securities firm before converting to a bank in response to the financial crisis, may cut compensation for the second year in a row as declining markets sap trading revenue. After setting aside 39 percent of revenue for compensation in 2010, the company has allocated 44 percent of revenue for pay and benefits so far this year. Revenue for this year's first nine months fell 25 percent to $22.8 billion.
Other News:
BofA reported a 6.6 percent revenue jump and $6.2 billion profit on accounting and the sale of China Construction Bank and other assets. [Reuters]
BofA lost its ranking as the largest U.S. lender by assets to JPMorgan Chase. [Businessweek]
BofA moved derivatives from its Merrill Lynch unit to a bank subsidiary flush with insured deposits. [Citi will close a proprietary-trading unit that incurred losses in the Q3. https://www.businessweek.com/news/2011-10-17/citigroup-closing-proprietary-unit-after-rout-in-equity-trading.html target=_blank>Bloomberg]
Hedge funds haunt Morgan Stanley. [WSJ]
Banks have started to make more loans. [DealBook]
Deloitte is bashed by accounting board for its lack of quality control. [NY Times]
Small business lender CIT Group's new online bank offers certificates of deposit in a move to diversify its funding sources for loans. [WSJ]
A former vice chairman of the New York Mercantile Exchange is the largest single donor to the non-profit magazine that ignited the Occupy Wall Street movement. [NY Times]
