Wall Street boom ends as Goldman cuts bonuses
Updated Dec 8, 2022, 1:17pm EST
Title iconThe Scoop
Goldman Sachs’ bonus pool for senior employees is expected to shrink by as much as half, people familiar with the matter said, as CEO David Solomon tries to boost flagging shareholder returns in a tough year across Wall Street.
A smaller bonus pool for its 400-odd partners isn’t surprising, at least directionally speaking. Last year was a huge year for high finance, and compensation reflected that, while 2022 has been a rough one. But Goldman’s revenue, which tends to be a proxy for pay, is only down 20% over the first nine months of the year, so the expected cuts look deeper this year. It will be finalized by the end of the year.
In February, the firm set a new goal of raising its return on equity — a measure of stockholder gains — to 14%. But then the markets boom of 2021 went poof, and profits are down across Wall Street. As of Sept. 30, Goldman’s figure was at 12%. There’s only so much money to go around and the choice, as it is for all CEOs in lean times, is between courting investors and rewarding employees.
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