Goldman Sachs' London MDs' bonuses rose 10% last year, to £549k
Goldman Sachs’ London office was a bit late to the 2023 compensation reporting party that its fellow American banks took part in already, but it's fine: the bank is still paying its high-earners a lot of money.
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Pillar 3 disclosures related to Goldman Sachs Group UK (GSGUK) show that the London subsidiary paid its highest-earning investment banking staff, known as Material Risk Takers (MRTs), an average of $1.58m (£1.25m) per head in 2023, a 6.6% increase on the $1.48m (£1.17m) it paid out in 2022.
MRTs are a legally classified group created by the UK’s Financial Conduct Authority, and are defined as those whose “professional activities have a material impact on the risk profile of the firm.” It’s a category that also includes people earning over £660k ($837k).
Although salaries at Goldman increased slightly, by 4.3%, most of that pay increase was from variable compensation, also known as bonuses. These increased from an average of $635k (£501k) per head in 2022 to $696k (£549k) in 2023 – an increase of nearly 10%.
By comparison, bonuses at the UK subsidiaries of JPMorgan, Morgan Stanley, and Citi all fell, whilst those at Bank of America increased 26%.
The catch for Goldman’s people was twofold. For one, the number of MRTs dropped, from 569 to 507 – a more substantial fall in numbers than any of the other American banks in London, some of which managed to increase their number of MRTs last year.
The other was that the very sharpest end of the stick – the highest of the high earners – fell in number. The number of people earning over €1m at the bank fell from 308 to 297. Much of that decrease was in the number of people earning between €1.5 and €3m.
The number of people earning more than that had a different fate, however. A dozen more people were earning over €3m in 2023 compared to 2022. Five more people at the bank were earning over €6m compared to the year before. There was a slight dip at the highest end (less people were earning over €8m), but there were more people at GS earning over €2m than before.
Goldman didn’t have the best 2023, and London was no exception. Revenues for Goldman Sachs International, its London-based subsidiary, were down 44% compared to last year in investment banking and 40% down in fixed income, currencies, and commodities trading, with only equities trading a bit of a light in the tunnel. Nonetheless, it held onto most of its headcount in the city – and it seems to have treated those who remained fairly well, too.
Goldman Sachs' London bonuses may rise even more dramatically last year. Under European Union bonus cap rules, the firm was restricted to paying bonuses no greater than 2x salaries and fixed pay. Now that the bonus cap has been removed, Goldman plans to pay bonuses up to 25x higher than salaries. Salaries may, however, fall as a result.
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