Bonus Speculation - Goldman Will Be Pleased (Not!)

New York magazine published an article a few days back, which is said to have lifted the lid off of Goldman's likely bonus numbers for this year. Although the figures mentioned are just speculative ones, and many quoted are merely average figures, the press has picked up on the story and the numbers are all over the market.

CityNews is not sure whether Goldman will be angry that these figures are being spread around, or will wear them like a badge of honour. They are, after all, impressive - there's talk that the firm has already set aside $9.25bn for its bonus pool (average $420,000 per employee), and that this could increase to as much as $11bn (average $500,000 per employee) by the time the firm closes this year's books.

According to the perceived wisdom, some lucky Goldman staff will be taking home bonuses of up to $40m this time around (although probably not too many of 'em!), and the average bonus for Managing Directors is likely to be $2m. Further down the food-chain, some staff in the firm's analyst programme are said to be able to look forward to getting as much as a 100% bonus ($70,000). This is, however, thought rather unlikely, given that investment banks generally peg most analyst bonuses fairly closely together, especially in the first year. Secretaries are thought likely to be given a bonus of between 10 - 25%.

And at the very top, Goldman bosses are likely to do very well indeed this time around, as 2005 has been a better year for the firm than last year. Although CEO Hank Paulson didn't take a bonus in 2004, he bagged $29.1m in restricted stock. Lloyd Blankfein, Goldman's President and COO, got almost $15m in bonus, and CFO David Viniar walked off with just short of $10m in the bonus stakes in 2004. All the top dogs can expect an uplift this year.

But a word of caution. Goldman usually pays out top dollar. Other firms will not have the resources to do the same - even in a really good year. And, even at Goldman, not everyone will share in the spoils.

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News