Closing summary
Time to wrap up... here are today’s main stories:
Goodnight. GW
Shares in Goldman Sachs have tumbled by 7% this morning, after net profits were hit by a jump in pay and bonus payments to its bankers.
Goldman Sachs is down 8% today
— Deepak Singh (@smarket) January 18, 2022
Why?
Compensation and benefits, the single biggest driver of expenses at Goldman, jumped 33% to $17.7 billion in 2021, pic.twitter.com/IfWhgNwFWR
Wealth correspondent Rupert Neate explains:
Goldman Sachs paid its 43,900 bankers more than $17bn (£12.5bn) last year, a 33% increase on 2020 as the investment bank celebrated a more than doubling of pre-tax profits to $27bn thanks to frenzied dealmaking on both sides of the Atlantic.
The pay and bonuses hike works out at about $403,000 for each employee on average, up from about $328,000 a year ago. It is the most the bank has paid out in wages and bonuses since 2007 at the height of the banking boom leading up to the financial crisis.
Goldman’s bankers will find out exactly how much they will personally collect for 2021 on Wednesday when the firm reveals annual bonuses on so-called “comp day”.
About 400 leading bosses – or the top 1% of the firm – are expected to receive a special one-off pandemic bonus in recognition of the bank’s success during the coronavirus crisis. The bonuses for this elite group are expected to range from the low single digit million to tens of millions of dollars, according to Bloomberg sources. Goldman declined to comment.
