PASSWORD RESET

Magazine of Socialist Action in Australia

Laughing all the way to the bank

US Bank Goldman Sachs is on track to pay $22 billion in salaries and bonuses this year, an average of $700,000 for each of its 31,700 employees. This is more than the record payout in 2007 at the height of the financial stock market bubble.

Last year Goldman Sachs paid out over $4 billion in bonuses. 953 employees each received an eye-watering million dollars or more and 78 executives each got a stratospheric $5 million or more.

Because the bank has repaid the $10 billion bailout it took from the US government, it is no longer subject to the pay restrictions that have been imposed on the likes of Bank of America and Citigroup.

Wall Street banks are forecast to pay out a record $140 billion in bonuses this year. Given the furore over bankers’ bonuses, Goldman Sachs did concede that it would curb bonuses to some staff from next year – without giving too much detail!

At the G20 summit in Pittsburgh in September world leaders agreed to introduce rules limiting bankers’ pay and many banks, including Goldman, signed up to its implementation. They did not agree though, under pressure from the US and UK, to set caps (limits) on bonuses.

But even these ‘light touch’ regulations are proving too much. The US Federal Reserve claim that they are “…an example…and not binding…” While the head of Barclays, Marcus Aguis, believes they are “susceptible to interpretation”.

A “compensation consultant” told The New York Times: “I definitely think they should be doing something about it… They have got to arrange the chairs on the deck so that things look different”. As the NYT wryly observed, “as long as it does not involve actually cutting pay.”

After governments around the world launched the biggest bailout in history to save the financial system from complete collapse, workers are now faced with plenty of ‘caps’ – pay freezes, pay cuts, job cuts, cuts in services, etc. Goldman executives think they have a “public relations problem” and are “perplexed by the resentment directed at their bank”! Your heart bleeds for them.

By SP reporters