Senior staff at Goldman Sachs in London received average pay deals of £2.7m in 2012 – a 50% rise on 2011 – the company disclosed on Monday, shedding fresh light on the rewards on offer in the City as Brussels prepares to impose a cap on bonuses.
The Wall Street firm published the pay deals for 115 of its staff to comply with European Union rules which require banks to reveal how many "code staff" – those who take and manage risks – they employ and how much they are paid in cash and shares each year.
Goldman revealed that it paid them £122m in cash and, according to estimates by the Guardian, £200m in shares, which they receive over three years and must hold on to for five years.
Under the same rules Bank of America Merrill Lynch revealed that the average pay of its top staff was just below £1m in 2012.
UK banks complied with the rule earlier this year when Barclays admitted it had 393 code staff paid an average of £1.3m, while Royal Bank of Scotland had 368 code staff paid an average of £701,000.
While the average for the 115 Goldman bankers is up on the £1.8m they received in 2011, it is less than the £4m average disclosed for 2010 – the first time the EU imposed the rules to lift the lid on pay deals in the financial world after the uproar over the role of bonus payouts in the lead-up to the banking crisis.
The issue of bankers' pay will be back on the agenda in the coming weeks when banks prepare to hand out bonuses for 2013 and as Europe imposes new rules on pay. From Wednesday the most senior bankers will have their bonuses capped at a sum equal to their salary – or double if shareholders grant specific approval – in rules opposed by the chancellor George Osborne and criticised by City regulators.
The cap was to automatically hit anyone earning over €500,000 (£425,000) a month until the European Banking Authority relaxed the proposals this month to allow bankers to apply for some staff to be excluded. It was estimated that this could allow 12,000 bankers to escape the cap.
Recent data published by the pan-European regulator showed 2,714 bankers in the City received more than €1m (£830,000) in 2012 – on average receiving almost €2m, up from an average €1.4m in 2011. In Germany 212 bankers received more than €1m and in France 177.
The bankers in London received bonuses worth almost four times their salaries and they are now expected to be handed allowances which do not count as salaries to maintain pay levels following the bonus cap.
The limit will affect the European operations of US banks but not offices elsewhere in the world. All employees of European banks will be captured.
"The significant majority of all the major banks will shift variable pay into fixed pay – with the intention that overall amounts of compensation won't change," said Jon Terry, partner at accountants PricewaterhouseCoopers.
Goldman's filing for its main London arm – Goldman Sachs Group Holdings (UK) – showed that £122m ($201m) was paid in cash and some 2.6m handed out in restricted stock units to code staff, which were worth around £75m $125m at the end of last year and some £200m($330m) in total. The exact value of the stock awards will not be known for five years.
The Wall Street firm disclosed in January 2013 that its total workforce was paid an average of $400,000 (£250,000) each last year, a rise of more than $30,000 on 2011. At the time it stressed that its ratio of pay to net revenues was the second lowest ever at 37.9%, compared with 42.4% for 2011, in an effort to demonstrate it was not being overly generous to its staff.
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