Goldmanites Fall Out of the 1%
Investment bankers are making less, but don't expect Occupy Wall Streeters to be happy.
www.cnn.com
Goldman CEO Lloyd Blankfein is cutting pay
The average compensation at Goldman (GS) is likely to fall by nearly $100,000 by the end of next year as new regulations, fewer deals and legal payouts hurt the firm's profitability. That's the conclusion of a recent report from a European division of rival JPMorgan Chase (JPM).
As recently as two years ago, Goldman's annual pay, which includes everyone from the people who work in the firm's IT department to CEO Lloyd Blankfein, had averaged $412,000. That salary put employees of the elite investment bank solidly in the top 1% of all earners in the United States. Last year, the cut off for the 1% was $368,000.
MORE: Forget 4 years ago: We're worse off than in 2011
But by the end of next year, though, analysts at JPMorgan Cazenove expect compensation at Goldman to average just $314,000. That will bump the average Goldmanite all the way down to near the bottom of the top 2% of all U.S. earners. The cut off for the 98% tops out at around $290,000.
Needless to say, this is not nearly the crushing blow to the Masters of the Universe that some hoped the financial crisis would be. And remember this is average compensation. There are still plenty of Goldman bankers who make millions. Blankfein was paid $12 million for 2011.
Back in 2008 and 2009, though, there was talk that the near collapse of Wall Street, and the fact that the government had to come to the rescue, would force financial firms to rethink how, and how much, they pay their employees. Washington appointed a pay czar. The Federal Reserve instituted new rules. Clawback provisions became the norm.
MORE: Goldman's fall from grace continues
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