Daily Mail 17th December 2008
Investment bank Goldman Sachs is to pay £4.3billion in bonuses to its City workers.
Despite the financial crisis and the spectre of soaring unemployment, staff at the bank will get an average of £142,600 each.
The international group, which is estimated to have 5,400 employees in London, is already nicknamed ' Goldmine Sacks' for the large extra payouts it awards to its star performers.
Yesterday the firm posted its first loss for almost a decade. And earlier this year it was forced to accept a £6.5billion lifeline from the U.S. government after falling prey to the economic crisis.
Now, an amount equivalent to two thirds of that aid will be paid to its workers as bonuses.
The news emerged as experts in Britain warned of a 'middle-class recession' with hundreds of thousands of white collar managers expected to lose their jobs over the next year.
Goldman's bonus plans come as anger grows among taxpayers at the way banks - in particular those that have received billions in bailout funds - have failed to pass on cash or interest relief to customers.
Criticising Goldman's, LibDem Treasury spokesman Vince Cable said: 'It's absolutely outrageous. It's clear that these people have learned nothing from the financial crisis. It shows the greed and lack of sensitivity - and ultimately stupidity - in gambling behaviour which caused this crisis can continue indefinitely.
'It is rewarding the taking of excessive risk and we know this caused the downfall of much of the financial markets.'
Labour MP John McFall, chairman of the Treasury select committee, questioned the wisdom of such a large payout during an economic crisis in which the banks played a central role.
He said: 'Is Goldman Sachs going to the taxpayer to get help in order to keep its staff bonuses at the same levels and prevent them from experiencing the problems that the rest of the economy - and normal people - are suffering during the current crisis?'
Goldman said its 'pay and perks' pool fell to £7.1billion for the full year, down from last year's record £13.2billion.
The bonus portion of this, estimated at 60 per cent of total pay, dropped to £4.3billion but is still worth an average of £142,598 per employee.
Overall, each worker is likely to suffer a 45 per cent cut in average pay to £237,470.
Goldman began telling staff who would be getting what in their January pay packet as it revealed its first quarterly loss since floating on the Stock Exchange nine years ago.
Among those not included in the bonus distribution is chief executive Lloyd Blankfein and six deputies who gave up their additional rewards this year.
The bank has about 400 partners who typically share a bonus pool worth about 20 per cent of the total payout, which in good years can mean bonuses in £5million - £10million bracket for top performers.
However, big fee earners can make much more. In 2006, one star employee, Driss Ben-Brahim, is believed to have banked a £50million bonus - a record for a single City trader.
Those days are a distant memory now, however, as the big merger and acquisition deals have dried up.
Wall Street's financial titans have been brought to their knees by the worst financial crisis since the Great Depression of the 1930s.
Goldman has had to take massive write downs on the value of its toxic investments in property and real estate.
The financial group made a loss of £1.4billion in the fourth quarter. Goldman said it had cut 2,500 staff in the quarter, bringing total numbers employed by the bank down to just over 30,000.
It is thought the bank laid off about 600 of its 6,000 workers in the City of London as part of the cull.
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