Goldman Sachs Group Inc. (NYSE:GS) has set aside $6.65 billion in compensation for 2008.
Bespoke points out that this number exceeds the market cap of 324 companies in the S&P 500.
To put this figure into perspective, the amount of money Goldman has
set aside for compensation this year exceeds the market cap of 324
companies in the S&P 500. It is also nearly one billion dollars
more than the combined market capitalizations of the twelve smallest
companies (CIT, MTW, NYT, EK, GCI, MBI, CIEN, AIV, CTX, CVG, KBH, MDP)
in the S&P 500.
Now, not everyone is getting their equal share of that $6.65 billion, as we've pointed out, but John Carney breaks it down:
- Goldmans senior executives -- known as PMDs for partner managing
directors -- slice off a huge chunk of the revenue. In 2007, the top guys
took around 20% of the total. This means that if compensation comes in
at $20 billion this year, that's $4 billion for Goldman's 400 or so
PMDs. If these guys and gals divided the money evenly, each PMD would
take home a cool $10 million each.
- The guys who find the most favor with the compensation gods will likely
take somewhere between $20 million to $40 million. Goldman has to
disclose what they pay the executive management team -- guys like Lloyd
Blankfein and CFO David Viniar
- The next level down at Goldman are the executive managing directors.
These are folks who didn't get tapped to join the inner circle of the
partnership, but have been at the firm a long time or control a good
book of business. They can probably expect to make somewhere between $2
million and $4 million a piece.
- The rest of Goldman's financial employees--the vice presidents,
associates and analysts -- get paid according to their performance
evaluations
What is also noteworthy is that Goldman increased its staffing numbers from 27,898 workers
at the end of the first quarter to
29,800 at the end of the second quarter -- but not because it did a lot of hiring though.
DealBook suggests that Goldman just reported those employees that the bank used to leave off the reports prior to the investment bank becoming a bank holding company to "deflate its compensation figures per employee." Goldman was apparently using its bank holding status to "do what other banks do and include every employee."
By making it look like everyone employed by the company is getting even compensation, Goldman won't get as much flak from politicians.
Yes, Goldman -- one of the top performers in the S&P 500, the same Goldman that paid back TARP, is apparently a "vampire squid" as (FT Alphaville Illustrates the resemblance) and is in talks to acquire the Treasury Department -- is finding it very convenient to be a bank holding company.
Besides the obvious reasons that Goldman became a bank holding company:
- there was pressure from the government
- investment banks were facing bank runs from investors (remember Morgan Stanley [NYSE:MS] and Citigroup Inc. [NYSE:C]?)
- the economy was unstable, and it seemed like every day another bailout was in the works
Goldman was also able to change its fiscal year when it converted to a bank holding company, and it was able to take
December's 2008 performance off the books. Not to mention Goldman appears larger than life next to its competitors. Yes, being a bank holding company is very convenient for Goldman.
- Maria Woehr Also see:
Goldman employees to fetch close to $1M
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