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FinanceGlobal 500

Goldman Sachs Chills Bankers by Withholding More Than 100 Year-End Bonuses

By
Feliz Solomon
Feliz Solomon
By
Feliz Solomon
Feliz Solomon
February 15, 2017, 4:21 AM ET

More than 100 bankers who worked at Goldman Sachs (GSJ) last year received a chilling message over the holidays, what’s known in the banking world as getting “blanked.”

Bloomberg reports that the firm gave no bonuses to more than 100 people, indicating that Goldman may be taking a harder line on employee performance than in years past.

The year-end bonus is usually a big factor in a banker’s compensation; a number of anonymous sources told Bloomberg that in previous years even those who didn’t impress the higher-ups still received something.

Not receiving a bonus at all is often understood as a signal that one should be seeking employment elsewhere.

Goldman Sachs uses a highly competitive compensation model, pairing pay with revenue and slotting staff into one of five performance tiers called quintiles. Most of those who landed in the bottom 20% were able to keep their jobs, but received no bonus pay, according to Bloomberg.

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The firm reportedly decided to reallocate the money that would have gone to the lowest-tier of bonuses, adding it instead to the checks of the best performers. According to Bloomberg, the firm declined to comment on the new bonus policy.

Most of those affected were reportedly among the firm’s mergers and takeovers advisors, a branch that ended with an 11% drop in revenues despite maintaining its rank as the world’s top deal-making advisory.

Goldman’s securities division also suffered from bonus cuts this holiday season, Bloomberg reports, though not quite as much. Client activity reportedly rose during the second half of the year after sweeping job cuts.

About the Author
By Feliz Solomon
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