Goldman Sachs Employees On Bonus Day: 'It's A Bloodbath'
Reports are creeping out that yesterday's bonus day wasn't all fun and games at America's most iconic investment bank.
Goldman's profits fell in 2011, in the final quarter alone by as much as 58 percent from the same period a year earlier. As a result, the investment bank set aside 21 percent less for compensation and benefits, according to Bloomberg News. And at least some Goldman employees had something to say.
"It's a bloodbath," a midlevel Goldman Sachs employee said in an interview with CNBC. "One girl was actually crying, I think," another Goldman employee said according to the report.
Some first-year Goldman analysts received $40,000 bonuses, and some second-year analysts received bonuses between $40,000 and $56,000, according to Dealbreaker. Business Insider notes that these bonuses can amount to half of these junior bankers' base salaries.
In fact, some Goldman Sachs bankers and traders learned that they were taking home no bonuses at all, the Wall Street Journal reports. And on top of that, the firm halved the total pay of some partners -- the company's highest-level employees -- while some traders got hit even harder.
It's not Goldman alone that's shrinking bonuses. Earlier this week Morgan Stanley, another major investment bank, limited bonuses for both junior and senior employees by capping cash bonuses at $125,000, according to the Wall Street Journal. Credit Suisse is also likely to no longer give junior bankers automatic pay jumps, according to Bloomberg News.
But Goldman employees worrying about bonuses haven't gotten the shortest end of the stick. The company slashed 2,400 jobs last year while setting aside an average of $367,057 in compensation per employee, 15 percent less than an average of $430,700 per employee in 2010, according to Bloomberg News.
Goldman Sachs is far from the only bank shedding staffers. Wall Street banks have already cut more than 200,000 employees.
Relative to the larger economy, of course, Goldman Sachs still pays a substantial portion of its revenue to employees, to the frustration of some shareholders, bank analyst Mike Mayo said in an interview with the NYT.
"In the tug of war between employees and shareholders, the employees are winning," Mayo said.
Thirty cents!
Do you know why? Minimum wage went up!
And if you complain, they'll hire some 11 year olds to take your place.
If they don't want that pittance, I'll be glad to take it off their hands. That's an absurdly high amount of money for a bonus.
So, in short: boo fucking hoo.
Obviously, if you compare it to a supermarket shelf stacker, or someone with long-term unemployment, these bankers are lucky and privileged. But from another perspective, these people may be paid very well, but they still can't control important factors like job stability or career progression, or the wellbeing of their industry, or their firm's culture.
Especially in this kind of comm, it's probably hard to digest these details. I guess knowing these kind of payrates is educational?
That's not condescending ~at all~. We're perfectly capable of "digesting" the factors you've brought up, but I, for one, don't give half the shit about the wellbeing of their industry that I do about the first point of your second paragraph: they're privelaged.
I don't get the point of posting these kind of articles here, tbh, because this doesn't stimulate any real political discussion at all. Just another endless round of finger pointing and hand wringing about the unfairness of the world, etc.
I also agree the investment industry is built on air and greed, and the separation between investment banking and commercial banking is inevitable and entirely necessary for the betterment of the global financial industry.
Assuming residence as New York, being where Wall St is and all:
I'll assume the lowest Goldman Sachs junior {base wage} was $80,000 - a $40,000 bonus 'can amount to half' of a junior's base salary, inferring to me that it never forms more than half of it, though I will happily stand corrected if wrong - a junior banker would earn at least £15.38 an hour {+ $7.69 (The $40,000 bonus as an hourly sum.)} (Averaged out because no information on O/T pay was relayed.)
The minimum wage in NYC is $7.25 for the first 40hrs and $10.88 thereafter - less than half the pay of a Goldman Sachs junior for the first 40hrs of work. Working 100hrs a week at those rates would net an annual wage of $49,025.60 - just below the $49,445 NYC median wage [Source: minimum-wage.org and US Census Bureau] But of course it is unlikely a minimum wage job would actually pay a single worker 60hrs of O/T - they'd likely hire another person at minimum wage, and possibly a third part-time worker for the remaining 20hrs. So realistically to work 100hrs, you're looking at two jobs with 20hrs O/T, or possibly three jobs with all 100hrs at minimum, for an annual wage ranging between $37,700 - $40,315.20. Oh, and given there are more people looking for work than there are jobs in the US right now, finding a first job, let alone a second and third could be quite a stretch.
So yeah, I understand well enough that whatever way you cut it, these bankers are privileged because they are still better off than the 1-in-5 New York residents who live in poverty.
{edits to correct error in maths as detailed in reply to
Edited at 2012-01-21 08:44 am (UTC)
Also, I come from a country with a higher minimum wage, and I've seen a breakdown of IB salaries in the terms of my country, and it is roughly equal to the minimum wage there.
I guess my takeaway from this is - Living in the US sucks.
Yes, I'd say these people are privileged, and I'd even go far enough to say that it's quite extravagant. I can safely say I won't be hitting twenty-three and change an hour any time soon. One month at the non-bonus weekly rate is higher than I've ever made in a year.
Glad I wasn't the only one who resorted to number-crunching though.
I hunted down a calculator as soon as I saw the top comment in this thread. The math was begging to be done.
I assumed such a job would be salaried as opposed to actually hourly paid, so O/T wasn't something I bothered factoring in. Though it's a point that adds more $$$ and more privilege.
And yes, there are times when the math is begging to be done and if ever there was one, this was it.
Then you have income taxes...*shudder*
It's a bit strange of you to criticise people for being 'illiterate' for not understanding the difference between digest and understand when you have just used illiterate in a completely wrong context.
Edited at 2012-01-21 03:09 pm (UTC)
And I never criticized anyone for taking my use of 'digest' wrongly. People miscontrued my meaning, justifiably, because digest has various meanings. I acknowlegdged that, and I tried to clarify the misunderstanding.
Why are you replying to a comment that isn't even directed at you, btw? Are you that hungry for wank? I'm amused.
Why are you replying to a comment that isn't even directed at you anyway? Don't you have anything better to do?
Many people work those long hours and don't get Wall Street's pay.
Edited at 2012-01-21 02:37 pm (UTC)
Because bloodbaths kinda generally require some actual blood.
...But then the cynical part of me says, "Nah!"
This irritates me so goddamn much that I can't even fucking ARTICULATE it. No. Just no. Shut the fuck UP.
And crying because your bonus was only $40,000 - I'm pretty fucking sure there are plenty of people in the US who would: a. cry with joy to have an annual wage of $40K, and b. happily take these junior bankers' jobs if earning $80K before bonuses is such a fucking hardship.
Edited at 2012-01-21 08:46 am (UTC)
The end of times is nigh