Goldman Sach Group Inc had set Wall Street pay records back in 2007. During this time, cheap credit abounded and stocks surged. To date, Goldman Sachs would be leading the banking industry again by putting more money aside for investors and less for staff.
Along with investment-banking divisions of six of the largest European and US rivals, Goldman Sachs had allocated a combined 39% revenue for reimbursement in the first nine months. This percentage was a decrease from 42% last year. So far, the 41% investor fund allocation ratio this year would be Goldman Sach's lowest nine-month figure.
With revenue earned rising at banks, employees hoped for bigger bonuses right after year-end payout cuts had been made. Instead, compensation for individuals had been shrunk as investors pressure banks to improve the return on equity. At each of the five largest Wall Street banks, the measure of profitability ranges from 10% or lower.
Chief executive officer and co-founder of the JMP Group Inc Joe Jolsen said, "Someone's going to be disappointed."
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