Canny Goldman Strikes Again On Pay

You have to hand it to those folks at Goldman - they sure know what they are doing when it comes to paying their staff.

Cast your mind back a couple of years, when firms were busy increasing base salaries (and their fixed costs too). Well Goldman looked into its crystal ball and decided that a group of several hundred employees firmwide should get their base salaries hiked - but only for two years, at which time it would revert back to what it was, or changed to whatever the prevailing market rate was at that time.

A deal was struck, contracts were signed / amended, and the group of bankers remained at their posts to help the firm reap record profits.

Fast-forward two years, the pay deal is coming to an end, and the bankers base salaries are being returned to their previous levels. But are they complaining ? Nope, as most appreciate that the Goldman move has enabled the firm to control an element of its fixed costs at what is clearly a difficult time for the industry. Most other firms don't have this luxury, of course, and can only respond to current markets conditions by slashing headcount. Perhaps this explains why Goldman has, to date, been able to lay-off rather less employees than most of its main rivals.

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