EEV : To my Greek friends: It is time to bring forward legal action against Goldman Sachs for the debt manipulation that magnified your financial hardship.
- The boost fuelled an average gold-plated payout of £234,000 per worker
- The bank plans to pay staff even more in light of European bonus laws
- New rules state bankers can receive bonuses equal to their salary
By Becky Barrow
PUBLISHED: 14:32 EST, 16 January 2014 | UPDATED: 15:13 EST, 16 January 2014
Goldman Sachs made more money from its investment banking division last year than any point in its 145-year history, except 2007 when the financial crisis struck.
The $6billion (£3.6billion) bonanza helped to fuel an average gold-plated payout for its workers of £234,000 each. The average full-time salary in the UK is £27,000.
To add to their good fortune, it emerged Goldman Sachs, yesterday dubbed ‘Sacks of Gold’, plans to pay its workers even more to get round controversial new European bonus laws.
Goldman Sachs (Chief Executive Lloyd Blankfein pictured) made more money in its investment banking division in 2013 than in any other year in its history
John Mann, the Labour MP and member of the Treasury Select Committee, said: ‘Goldman Sachs would be better renamed ‘Sacks of Gold’ with these extraordinary levels of pay.
‘It is a shame that such talent is not used in science, technology and medicine for the good of the country.’
Under the new rules, a banker can be paid a bonus equal to their annual salary. It is also possible to pay a bonus worth twice their annual salary, if shareholders approve.
The new rules only affect European banks, or the European offices of banks whose headquarters are based elsewhere in the world.
As a result, London-based bankers at Goldman Sachs were demanding to leave the capital and move to places such as Dubai and Hong Kong where they would not be hit by the cap.
At present, a Goldman Sachs worker is typically paid a basic salary plus an annual bonus. Under the new proposals, senior staff will also get a third tranche of pay, known as ‘role-based pay’.
Labour MP John Mann said the bank ‘would be better renamed Sacks of Gold’
This will protect their bonus payouts because it will be a multiple – one or two times – of a larger payout, that is their basic salary plus their new role-based pay.
The Chancellor has launched legal action against the European Union’s bonus cap over fears it will have the opposite effect of pushing up basic salaries.
Frances O’Grady, general secretary of the Trades Union Congress, said: ‘While millions continue to suffer from joblessness, real wages falls and cuts in public services, Goldman Sachs is brazenly showing who the main beneficiaries of the recovery are with another bumper year for their investment bankers.
‘The very people who caused the crash are now hogging the fruits of recovery for themselves, and governments are letting them get away with it.’
Over the last decade, Goldman Sachs estimates it has paid around £10billion in tax in the UK from corporation tax to income tax paid by its workers.
Goldman Sachs was paid £2.8million for its role as one of the banks involved in the privatisation of Royal Mail. The shares, priced at £3.30, were yesterday worth nearly double at £6.04 each.
It comes after Sir Philip Hampton, chairman of Royal Bank of Scotland, expressed his shock at bankers who are ‘absolutely outraged’ to only earn £4million a year.
At a conference last year, he revealed the ‘completely out of body experiences’ negotiating people’s pay packages at the State-owned bank with people who occupy a ‘different world.’
Sir Philip recalled one meeting when a man was complaining bitterly that he only earned £4million a year when a rival at another bank earned £6million for doing the same job.
He said: ‘I can tell you I’ve had some completely out of body experiences in recent years where I was talking to somebody about potentially getting a £4million pay package.
The bank also announced plans to pay employees more as a way to get round new European bonus laws
‘And outrage coming across the table from the other side because they know that somebody doing a comparable job at another bank is getting £6million.
‘And this is absolutely outrageous to them. That somebody is getting 50 per cent more.’ Sir Philip, who earns a basic salary of £750,000 a year, said many bankers think it is ‘very, very, very unfair that they are only left with £4million to rub along with.’ <mailto:email@example.com>
<mailto:firstname.lastname@example.org>Goldman Sachs said its total ‘compensation’ pot was reduced by $155million (£95million), and that this money was given to its charity, Goldman Sachs Gives.
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