Goldman Sachs Group Inc., the fifth- biggest U.S. bank by assets, cut the portion of revenue it pays employees to the second-lowest level as a public firm.
Compensation for 2013, which includes salaries, benefits, bonuses and the expense of deferred pay awarded in prior years, fell 2.6 percent from 2012 to $12.6 billion, the New York-based company said today in a statement. Revenue in the same period was little changed at $34.2 billion.
Chief Executive Officer Lloyd C. Blankfein, 59, allocated 37 percent of revenue for pay in 2013, compared with 38 percent the previous year. While the average ratio has dropped by more than 6 percentage points since 2008, compared with the five years before the financial crisis, Blankfein has said he’s wary of cutting too much and losing top performers.
“There’s always a war for talent,” Blankfein said at an investor conference in November. “We’re always under pressure for good people. I would say this isn’t the most intense period of that war that we’ve ever experienced, but it’s always there and we’re always conscious of it.”
The compensation expense is enough to pay each of Goldman Sachs’s 32,900 employees $383,374 for the year.
“We have an implicit contract with our people always, which is to pay for performance,” Blankfein said in November. “At times when our people perform well, and for those who perform well, we’ll pay them well even if there’s less pressure outside because that gives us the basis and the credibility to pay them down when we don’t perform well.”
Compensation for employees at the corporate and investment bank of JPMorgan Chase & Co., the largest U.S. lender, fell 4.2 percent for 2013 from a year earlier. The $10.8 billion represented 30 percent of revenue at the unit, which was created in 2012 when the New York-based company combined its investment bank with the corporate bank and treasury and securities-services units.
Figures for average pay don’t represent what any employee actually receives and are calculated by dividing the total compensation expense by the number of workers.