NEARLY 6,000 UK employees at US banking giant Goldman Sachs are among staff sharing out $12.9 billion (£8.1bn) in pay and bonuses for 2012 after it posted better-than-expected profits.
The total pay package – based on its global headcount of 32,400 – equates to an average of $399,506 (£249,977) for each of its employees and is six per cent higher than in 2011.
Its bumper pay and bonus deal is likely to further stoke controversy after Goldman was forced to back down on Tuesday over plans to defer bonus payments to UK staff until the new financial year after Bank of England Governor Sir Mervyn King attacked the move.
Fellow US investment banking group JP Morgan Chase also posted full year figures yesterday revealing its staff salary and bonus bill soared to $30.6bn (£19.1bn), up five per cent on 2011.
But the company’s chief executive Jamie Dimon saw his annual bonus cut in half – to $10m (£6.3m) after a damning report following an investigation into its so-called “London Whale” trading loss.
The groups have ensured a strong start to the US bank reporting season, with both firms smashing market expectations.
Goldman reported net earnings nearly trebling to $7.3bn (£4.6bn) in 2012, while JP Morgan posted a record $21.3bn (£13.2bn) in profits after a 53 per cent surge in the final quarter.
Goldman’s annual haul comes after fourth quarter earnings soared to $2.83bn (£1.8 billion) compared with $978m (£612m) a year earlier after a strong performance from its investment banking arm.
The group made a climbdown on tax plans that would have potentially cost the Treasury millions of pounds.
Goldman had been proposing to allow bankers receiving bonuses to benefit from the cut in the top rate of income tax from 50p to 45p, announced by Chancellor George Osborne in last year’s Budget and which comes into effect on April 6.
Its change of heart came after pressure from the Bank and Treasury, with Sir Mervyn telling MPs it was “lacking in care and attention” to the rest of society.
Addressing the Treasury Committee on Tuesday, Sir Mervyn said it would be “depressing” if bankers choose to defer their bonuses until after the introduction of the new tax rate, warning the banks they risked provoking anger from the rest of society if they were to dodge paying tax on their bonuses at the current 50p top rate.
“I find it a bit depressing that people who earn so much seem to think it is even more exciting to adjust the timing of it to get the benefit of a lower tax rate ... knowing that this must have an impact on the rest of society, when even now it is the rest of society which is suffering most from the consequences of the crisis,” he said.
“I don’t know what will happen, and they haven’t made any statement, but I think it will be clumsy and lacking in care and attention to how other people might react.”
Though there is was nothing unlawful about such a move he added: “In the long run, financial institutions ... do depend on goodwill from the rest of society. They can’t just exist on their own.”