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Goldman Sachs Cutting 35% of its revenue for Staff Compensation & Benefits

By on October 17, 2019 0

Goldman Sachs set aside 35% of its revenue for the staff compensation and benefits this year that is the lowest that ratio has been in at least a decade, according to an analysis of Goldman’s data.

The average Goldman (GS) employee had earned about $246,216 for the first nine months of 2019, which is less than half the $527,192 at the same point in 2009.

The CFO Stephen Scherr says, “As we grow more platform-driven businesses, we expect compensation to decline as a proportion of total operating expenses,”

The bank is on track to pay its employees the lowest of any year, in at least the past decade, and the executives warned that this trend will continue as software consumes more of the company’s businesses.

According to an analysis of Goldman’s data, Goldman Sachs set aside 35 percent of its revenue for staff compensation and the benefits so far this year, and the lowest since at least 2009.

The average Goldman (GS) employee earned $246,216 for first nine months of 2019, which is less than half the $527,192 at the same point in 2009.

 

For banks, trading became far less lucrative, after the financial crisis-era rules discouraged hedge-fund like that bets and central banks drained volatility from the markets. The human traders have been disrupted at the same time, by electronic firms like Virtu and XTX, places that employ a few dozen coders to trade the billions in stocks and currencies every day.

 

“We are in the midst of the biggest marriage of tech and finance in history,” said Mike Mayo, a veteran bank analyst at Wells Fargo. “It means more bots relative to bankers, more machines, more automation, more scale. The next decade will see the implementation of technology to a greater extent and in ways that have never been done before.”

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