Goldman Sachs has succumbed. Today's first quarter results reveal that Goldman is now paying its staff less than at any time in the past five years. Compared to 2013, pay per head in the first quarter is down more than 9%. Compared to the first quarter of 2010, it's down more than 25%.
What's behind the turning off the spigot at Goldman Sachs? It might have something to do with the firm's 10% reduction in net earnings year-on-year in the first quarter. It may also have something to do with the fact that more and more of Goldman's staff are based in lower cost centers like Salt Lake City and Mumbai. Then again, it may also be related to the fact that fixed income sales and trading - traditionally a big driver of revenues and profits for Goldman Sachs has also had its worst quarter for half a decade.
As we reported earlier, Morgan Stanley cut overall compensation spending at its investment bank in the first quarter. 2014 isn't shaping up so well for investment bank employees after all.