Credit traders at Goldman Sachs are said to be unhappy with this year’s bonus pool. There’s been at least one senior departure and London headhunters said the bank’s traders are alert to opportunities to move elsewhere.
“Even the performers in Goldman’s EMEA credit business seem to have been paid down 8% this year,” says one London fixed income headhunter, who deals with candidates at VP level and above. “Goldman paid well in rates, but have been very selective about paying for performance in credit and they bar-belled the distribution a lot more than usual – some people in credit got very little, which is unusual for Goldman as they’ve always managed to pay their people in the past.”
Goldman Sachs doesn’t comment on compensation, but the alleged disappointment on the bank’s London credit desks follows a year in which Goldman’s fixed income sales and trading revenues rose by 3% compared to 21% at J.P. Morgan and 11% at Bank of America. It also follows an 8% reduction in average pay per head at the firm after the bank boasted about its ability to flex compensation costs to boost the bottom line.
If senior credit traders are unhappy in London, fixed income headhunters in New York say it’s senior analysts and associates who are disappointed at 200 West. “There’s a lot of juniors in Goldman’s U.S. FICC business who feel they’ve been underpaid,” says one. “These guys have been on a steep curve of accelerating compensation and they were expecting to go from $150k to $200k, but have only gone to $160k. That’s not gone down well, especially as a lot of them had a good year and were told they were the best performers in their quartile. People are pretty underwhelmed.”
However unimpressive the compensation might be in parts of Goldman’s fixed income business, headhunters emphasize that it’s still a lot better than at many competitors. “Goldman is still going to be paying significantly more than European banks and Morgan Stanley,” says one, “It’s just J.P. Morgan and Bank of America that have paid better than Goldman this year.”