Top Firm Said Planning To Slash Bonuses Close To Zero

No Pot of Gold

Hmmm. Now wouldn't this be something.

But we think there's little likelihood of it.

There are various media reports circulating that Goldman Sachs is having such a bad time of it that it is considering drastic action - yes, the Wall Street firm famed for paying out the biggest bonuses is said to be thinking about paying out none at all this year-end. In other words, Goldman's finest are to get doughnuts (or donuts) to go with their smaller cups of free coffee.

The reality, of course, is that it's far too early to tell the size of year-end bonus pots, as firms have the whole of Q4 to make up lost ground (although admittedly things don't look too good at present).

Having said that, Goldman could decide to set aside little (or nothing) for variable compensation (bonuses) from its Q3 revenues (and may even clawback some of its provision for the first 6 months of the year when its Q4 earnings become known), but you just can't speculate with such certainty about bonus pot sizes at this stage in the game.

Goldman usually starts its bonus round process around mid-November and, like most firms, will advise staff of their numbers in early / mid January, and pay out at the end of that month.

And as for the prospects for doughnuts ? Well, since Goldman went public in 1999, the firm has never paid out zero bonuses across the board, although individuals and divisions (like everywhere else) have been known to come out with nothing in lean years (and 2011 is shaping up to be pretty lean for the industry).

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