eFinancialCareers

Goldman Sachs is due to reveal the true range of its bonuses in the next few days. Will it live up to expectations?

Goldman will report its fourth quarter results next Tuesday, and is expected to disclose bonus numbers to managing directors later this week and junior staff after the weekend.

Although the firm’s profits rose 30 percent in the first nine months of the year, the London newspaper the Telegraph predicts bonuses won’t share that luster. It says total comp at Goldman will be up 10 percent from 2006, but that additional headcount means average employees will see a 7 percent drop in their allocation to a mere £293,000 (or about $599,000).

Headhunters offer widely divergent predictions on Goldman’s payouts. “The general noise is that the average will be up 10 - 20 percent,” says the chief executive of one boutique. “And the stars will be up 30 percent on last year.”

The head of another niche search firm sides with the Telegraph, saying flat to down will be the order of the day: “Goldman has a bigger pot, but it needs to be shared between more people,” he observes. “Overall it’s 5 - 6 percent down.” He adds that while star performers in areas like principal investments and prop trading are likely to be paid up substantially (apparently, expectations are for increases of as much as 40 percent), others are will be paid down to accommodate this.

Meanwhile, rivals are in no position to reward staff generously this year, removing the need for Goldman to pay up to prevent poaching. “It takes a lot for someone to leave Goldman,” says the headhunter. “They are very aware of this. The retention premium in bonuses will be removed.”

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