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Big Goldman Sachs pay increases coming to London & NY after cuts

Goldman Sachs bonuses could be pretty good this year. Reuters reported last week that the firm is considering paying higher bonuses to retain star traders and dealmakers in 2023 and newly released accounts for its UK-based and US-based businesses seem to confirm this.

At Goldman Sachs International, which includes Goldman's London based sales and trading and investment banking businesses, spending on pay per head for 2023 was up 37% year-on-year in the first nine months, to $492k (£392k). 

At Goldman Sachs Bank USA and Subsidiaries, which includes Goldman's primary lending entity and its transaction banking arm, spending on pay is up 49% this year to $355k.

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The implication is that the bonus round may be pretty good, even though the firm as a whole has made some big writedowns, even though Goldman's return on tangible equity is down to 7.6% and even though net earnings for the first nine months at the entirety of Goldman Sachs are down by over a third. 

Pay increases at the two subsidiaries follow headcount cuts. At Goldman Sachs International, headcount was down 14% or just over 600 people in September '23 vs. September '22. However, Goldman actually added 80 people in London between June and September, likely as a result of graduate hires. At Goldman Sachs Bank USA and Subsidiaries, headcount was down 14% year-on-year. 

Both entities are doing ok in terms of net profits in 2023. Profits at Goldman Sachs International are up 4% this year. At Goldman Sachs Bank USA and Subsidiaries they've nearly doubled.

Last year, Goldman Sachs contemplated cutting pay for its traders, but was forced to reverse that decision after objections from heads of the business. This year, it needs to pay people while Citadel Securities, Citadel, Millennium and other hedge funds eye up its staff. 

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AUTHORSarah Butcher Global Editor

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