ONTD Political

Bloodbath at the Goldman Sachs Circus Maximus

8:27 pm - 01/20/2012
I Almost Feel Like Shedding a Tear... Almost.

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.

aviv_b 21st-Jan-2012 04:15 am (UTC)
World's smallest violin brought out especially for the poor employees of Goldman Sachs. I got a two percent raise last month - my first pay raise in four years. And you know what, I wouldn't have even been upset if I hadn't gotten a raise - I'm just glad to have a full time job with benefits that doesn't suck out my soul on a daily basis.
ericadawn16 21st-Jan-2012 05:00 am (UTC)
I got a raise this month!

Thirty cents!

Do you know why? Minimum wage went up!
aviv_b 21st-Jan-2012 05:09 am (UTC)
Congratulations! Don't be squandering all that extra money - after all the Republican candidates know you didn't really need to be making the minimum wage in the first place. You're just taking valuable income from the Job Creators/Overlords.

And if you complain, they'll hire some 11 year olds to take your place.
qable 21st-Jan-2012 04:59 am (UTC)
On one hand, I want to roll my eyes at the itty bitty bonuses those poor widdle investment bankers received. On the other hand, nice work with the job creation, there. 200,000 employees, really?
qable 21st-Jan-2012 05:06 am (UTC)
capping cash bonuses at $125,000

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.
bushy_brow 21st-Jan-2012 06:23 am (UTC)
Yeah, not to mention $40,000 to $56,000 amounting to HALF their salaries? I'd love it if $40,000 - $56,000 were my ENTIRE salary.
deathchibi 21st-Jan-2012 08:37 am (UTC)
Me too. I just can't feel bad for someone who makes more than quadruple what I do. :|
bushy_brow 21st-Jan-2012 12:51 pm (UTC)
Nope. Even if they do work 100 hours a week, as someone said, I'm sure none of it is as physically intensive as what most minimum wage part-time workers do, either.

So, in short: boo fucking hoo.
jwaneeta 21st-Jan-2012 05:10 am (UTC)
I sure hate it for ya, ya fuckin' parasites. *weeps*
vaegue 21st-Jan-2012 05:17 am (UTC)
To put it in perspective - some of these employees, the junior ones especially, work up to 100 hour weeks. If you break that down to an hourly rate, the pay isn't all that extravagant.

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?
windy_lea 21st-Jan-2012 07:44 am (UTC)
Especially in this kind of comm, it's probably hard to digest these details.

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.
anjak_j 21st-Jan-2012 08:45 am (UTC)
vaegue 21st-Jan-2012 10:32 am (UTC)
I don't think you understood me right when I said 'digest'. Digest=/= understand. (Though I did look up the definition after a bit of thinking, and it could go both ways, so I understand why you'd instantly jump. JSYK, it is privileged, not privelaged) You'd have to be illiterate not to understand this. I meant 'digest' as in 'this won't sit well'.

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.
anjak_j 21st-Jan-2012 08:33 am (UTC)
Digesting this through maths.

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 gable}

Edited at 2012-01-21 08:44 am (UTC)
vaegue 21st-Jan-2012 10:37 am (UTC)
My comment as above: I don't think you understood me right when I said 'digest'. Digest=/= understand. (Though I did look up the definition after a bit of thinking, and it could go both ways) You'd have to be illiterate not to understand this. I meant 'digest' as in 'this won't sit well'.

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.
qable 21st-Jan-2012 08:33 am (UTC)
The article says the smallest bonuses are equivalent to half the base salary rate. The lowest number given is $40,000, so the base salary for those people would be $80,000. Let's say they get one vacation week, and therefore work 51 weeks a year. That comes to $1,562.63 a week. At 100 hours, those low ranking employees are making over fifteen dollars an hour. Popping the bonus into the equation brings them to $120,000 a year, or $2,352.94 a week and $23.35 an hour. Again, this is at the bottom end of the payscale and therefore not representative of the average.

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.
anjak_j 21st-Jan-2012 08:37 am (UTC)
Oooh, I made a mistake in my maths - in my defence it's nearly 9am and I've not slept at all - I forgot that the bonus would be on top of the $80,000.

Glad I wasn't the only one who resorted to number-crunching though.
qable 21st-Jan-2012 08:48 am (UTC)
I forgot to do the math to allow for time and a half after forty hours, but it wouldn't make a difference at the weekly level.

I hunted down a calculator as soon as I saw the top comment in this thread. The math was begging to be done.
anjak_j 21st-Jan-2012 08:56 am (UTC)
I don't know about the US, but holidays in the UK are paid - I was wondering why we arrived at different figures for the hourly rate. So essentially, here you're paid every week, even on vacation.

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.
qable 21st-Jan-2012 09:04 am (UTC)
Salaried positions generally include paid vacation time, but I've seen people with vacation pay receive pay drastically lower than what they'd get if they were at work. Minimum wage employees almost never get vacation pay. It's one of the things that are typically at the discretion of the employer. And yes, salary doesn't touch O/T. I'd have to do more number juggling to get an accurate hourly-wage equivalent to 100 hours per week and $120,000 a year, especially if I included a vacation week.
anjak_j 21st-Jan-2012 08:19 pm (UTC)
Ah. Here you get what you'd be paid if you were at work - waged or salaried. Since I don't know the entire ins and outs of wages and salaries in the US, I could only work with assumptions, thus why the quick and simple 'divide by 52(weeks), divide by 100(hrs)'.

Then you have income taxes...*shudder*
evilgmbethy 21st-Jan-2012 10:12 am (UTC)
they still chose that line of work, though. It's not like anyone falls into a job at Goldman Sachs, you have to seek out employment like that and presumably get the kind of education specifically aimed at getting a job like that. So. No, really, no sympathy. And a hundred grand a year is still a hundred grand a year and is still extraordinarily privileged. Maybe they have to work like dogs to get it, but that is a choice they made.
vaegue 21st-Jan-2012 10:44 am (UTC)
I never mentioned anything about sympathy at all. I definitely don't feel sorry for them. Honestly, apart from the slightly entertaining outrage factor, I find these kind of articles utterly useless. The industry obviously needs huge reform, and this kind of discussion isn't exactly thought provoking. You'd have to be illiterate to not understand the unfairness of this kind of pay.

rebness 21st-Jan-2012 03:07 pm (UTC)
You'd have to be illiterate to not understand the unfairness of this kind of pay.

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)
vaegue 21st-Jan-2012 11:03 pm (UTC)
Illiterate means not being able to read or write. I'm confident I'm using it in the right context. Either way, the message is - this is damn unfair.

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.
nesmith 21st-Jan-2012 06:43 pm (UTC)
I think you should pay attention to your own prior clarifications and look up the word "illiterate" since it doesn't mean what you seem to think it means.
vaegue 21st-Jan-2012 11:05 pm (UTC)
Nope. I understand what it means. It works in the context I used it in. Was it the best word? There could be better. But it doesn't matter, and you pointing it out doesn't enrich the discussion in any way shape or form.

Why are you replying to a comment that isn't even directed at you anyway? Don't you have anything better to do?
nesmith 22nd-Jan-2012 01:08 am (UTC)

maladaptive 21st-Jan-2012 02:36 pm (UTC)
Yeah, I'm going into a field with 80 - 100 hour work weeks, and I'm still only looking at about $60,000 on the optimistic side. Sooooo it is pretty extravagant still.

Many people work those long hours and don't get Wall Street's pay.

Edited at 2012-01-21 02:37 pm (UTC)
vaegue 21st-Jan-2012 11:07 pm (UTC)
Of course. I acknowledge the sum of money as a whole is grossly unfair.
kyra_neko_rei 21st-Jan-2012 05:42 am (UTC)
Is this the Onion, or did someone really and truly call it a "bloodbath" when their bonuses are only double the US median household income?

Because bloodbaths kinda generally require some actual blood.
bushy_brow 21st-Jan-2012 06:27 am (UTC)
The hopeful part of me is thinking that maybe, just MAYBE, this will finally open some people's eyes to how trickle down economics just doesn't work.

...But then the cynical part of me says, "Nah!"
anjak_j 21st-Jan-2012 07:00 am (UTC)
I might actually care about these whining assholes at Goldman Sachs if the company they work for didn't owe the British taxpayers what could be between £5m and £20m from a shortfall related to their tax payments.

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)
rebness 21st-Jan-2012 03:08 pm (UTC)
sleeky 21st-Jan-2012 08:39 am (UTC)
I am reading an article about people getting laid off and small bonuses and I have no idea what their job even is but it still sounds like the best job ever. Half your paycheck? Omg, if I got a bonus of half my pay check from one month I would be so excited.
evilgmbethy 21st-Jan-2012 10:08 am (UTC)
yeah don't curr. they're in an industry which is basically parasitic on the entire economy. cry moar, have a bowl of QQ stew, etc
castalianspring 21st-Jan-2012 01:50 pm (UTC)
I have no sympathy at all for people who get more in an oh-so-small! bonus than I and many many others do in an entire year.
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