Goldman employees unhappy with low bonuses after CEO's $39M payout
What's the story
Goldman Sachs employees are unhappy with their end-of-year bonuses, which they deem insufficient.
The unhappiness comes after CEO David Solomon received a hefty pay rise after the bank's best earnings in three years. He took home $39 million in compensation for 2024, a 26% increase from 2023.
The bonuses were revealed internally two weeks ago and have been termed "chintzy" by a number of employees who spoke to the New York Post.
Controversy
Employees are angry
Solomon's hefty pay rise has triggered anger among employees. One equities trader told The Post, "When news of Solomon's bonus was released, a lot of folks here just rolled their eyes," suggesting the CEO's fat payout came at their expense.
Bonus backlash
Employee frustration over bonus distribution
The bank's decision to award Solomon an additional $80 million "golden handcuffs" bonus if he stays with the company for another five years, has further fueled employee dissatisfaction.
Some employees believe senior management cut their compensation to boost the bank's quarterly and annual earnings.
A source told The Post, "There's a lot of frustration, anger, and disappointment. It feels demotivating when leadership seems more focused on external perceptions than internal morale."
Profit surge
Profits soar amid bonus controversy
Despite the raging bonus controversy, Goldman Sachs posted a three-year high in profits.
The bank's profits soared by 67% to $14 billion last year, buoyed by a revival in merger and acquisition activity on Wall Street, after a post-COVID slump.
However, the financial success has not quieted employee dissatisfaction over their perceived meager bonuses.
Online outrage
Employee dissatisfaction spills over onto online forums
The bonus issue has also sparked conversations on the Wall Street Oasis forum, a popular destination for New York financiers.
One first-year associate was disappointed at getting a $135,000 bonus on top of a $200,000 base salary, saying they were "not happy with the number."
Another banker wrote, "The bottom line for 2024 comp is this: the firm crushed it and a lot of people who made it happen were given cheap seats at the celebration."
Compensation decline
Analyst confirms drop in bank's overall compensation ratio
Wells Fargo analyst Mike Mayo confirmed that Goldman Sachs's overall compensation ratio has actually fallen, dropping to 32% in 2024 from 35% in 2023.
This important metric reflects the percentage of a bank's net revenues that go toward employee earnings.
Despite the decrease and continued employee dissatisfaction, Mayo defended Goldman Sachs as a "best-in-class global investment bank."