The Banking and Strategy Initiative

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Goldman Sachs goes for a 50% savings bill to 411 partners

Goldman Sachs New World Headquarters

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A top heavy Goldman Sachs has decided to cut pay ( not bonuses ) in half for its over 400 global partners. in this years cycle, a lower

than usual 269 partners were made. The Pay cuts would saave between $3 – $6.5 bln per head and  thus this request alone would save the company $1.2 bln – $1.5 bln in compensation expenses. The Goldman Sachs compensation bill was less than 40% for the latest quarter and has been falling on the strength of bonuses for more than 10 quarters since 2008. Its 2010 wage bill was the last standoff it had with regulators while it has been planning and executing exits, largely from its Wall Street Trading community for a targeted $1 bln in savings every quarter.

While bonus cuts were expected, and GS was known to be rooted for no bionuses for this year’s performance, the new developments would not be more than a week old as revenues for Q4 came lower on expected lines. Street is expecting 11% dip in Wall Street Revenues and upto 40% dip at trading desk rich Goldman Sachs. Goldmans Sachs is focussing on changing its model aat the business segments itself, walking into serious banking business with funds/wealth management and investment Banking advisory on back of the Facebook IPO and/or Sprint proposed takeover of T Mobile amon gother deals their banks have snagged for 2012 if and when they do happen.

Fixed income Traders can expect even bigger pay cuts at the top end of the $3- 6 bln band. morgan Stanley expects to cut bonuses for trading teams by 30-40% after bringing their comp ratios to below 25% in Q3 while Wealth divisions took home 60-65% of revenues in Q3 

U.S. Morning Call: Goldman Sachs partners could see pay cuts, Thomson Reuters: Reuters Insider

Commodities trader did better than Fixedincome traders in 2011 but they have been thinning the herd at all Wallstreet firms too in face of job cuts and pay cuts leaving to set up or join hedge funds as over 233k traders are reported out of a job

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