With banks in London banned from paying bonuses of more than 2x base salary by the European Union, ‘role-based allowances’ (or ‘fixed allowances’) have become commonplace. We’ve already remarked upon the enormous allowances on offer at Barclays, but it seems they are nothing – nothing – compared to the massive handouts on offer at Goldman Sachs.
Goldman’s proxy statement, filed last week, reveals that Michael Sherwood, co-chief executive of Goldman Sachs International, will receive a share-based fixed allowance of $11.15m (£7.6m) for 2015 – up from $9.15m in 2014, an increase of 22% in one year.
Sherwood’s allowance is nearly 13 times larger than the ‘mere’ £600k paid to Tom King, and King is head of Barclays’ entire investment bank globally. As such, Sherwood’s windfall underscores how much more generous Goldman is than its UK-based rivals. Sherwood’s massive allowance means the firm can continue to pay him at the level to which he’s become accustomed: before the EU rules came into force, he earned a total of $21m in 2014, of which just $1.85m was salary.
Separately, a video has emerged of a hazing ritual at commodities broker Marex Spectron. In the film, illicitly made a year ago, a 23-year old junior is encouraged to eat eight burgers in 60 minutes while senior colleagues place bets on the chances of him vomiting. “Have a good look at yourself. You’ve got three minutes to turn this round. It’s £300. Get on with it,” says one senior trader just before the junior vomits in the bin. Marex, which claims to be a ‘friendly dynamic group’, says it’s disciplined the individuals involved and “would take a recurrence extremely seriously.”
Lloyd Blankfein was awarded a $7m contingent bonus. (Bloomberg)
Goldman’s tech team is by far the largest, proportional to the rest of its organization. However, if you work for Goldman and become proficient in Slang – its proprietary programming language, you’ll find it hard to move elsewhere. (BusinessInsider)
30-something banker complains that banks are now boring: “In an environment where pay and bonus pools are stagnant, brute politics and internal credit-stealing are ascendant.” (Financial Times)
Portuguese-born Antonio Horta Osorio, New Zealander Ross McEwan, and British-born Stuart Gulliver are all non doms. So is Mark Carney. (Sunday Times)
If Ed Miliband wins the election all the French financial services professionals will go back to France. (Financial Times)
Deutsche Bank is on the verge of agreeing the biggest LIBOR fine of the lot. (Telegraph)
There will no longer be a head of risk, audit and compliance at Citi. (Financial Times)
The more you work, the more you’ll drink. (HBR)