Goldman Sachs Group Inc. Chief Executive Officer David Solomon was paid $23 million last year, a third of what his predecessor received in 2007. Other Goldman employees haven’t fared much better.

Compensation per employee is down by 61% at the Wall Street firm when adjusted for nominal wage growth in the period, according to company filings and calculations by Bloomberg. Goldman had the sharpest pay decline among a dozen of the largest U.S. and European banks, followed by Credit Suisse Group AG at 46%. The group had an average reduction of 14%.

Thanks in part to tax cuts and strong consumer spending, the biggest U.S. banks are more profitable than ever, and European lenders are recovering. That hasn’t translated, however, into better pay for traders and investment bankers. And financial companies joining the shift to automation that’s also reshaping other industries may mean the pre-crisis period will forever be the high water mark for outsize salaries in banking.

Pay cuts have been most dramatic at relatively small Wall Street firms that focus on investment banking, securities trading and wealth management and lack the large retail operations of rivals. It’s not only the bonuses that have declined since the 2008 crisis, but falling compensation reflects a shift from risky trading to consumer banking and wealth management. Banks also have raced to adopt high-end technology, changing their mix of employees in the process.

“Business has transformed over the past decade,” said Richard Lipstein, managing director in the financial-services practice at recruiting firm Gilbert Tweed International. “Traders have been the worst hit as trading isn’t what it used to be. Now jobs are in technology and retail. You may add more employees, but those are not as high-paying as traders.”

Goldman Sachs, once the symbol of cutthroat trading, has ventured into consumer services, credit cards and transaction banking. Credit Suisse has focused more on wealth management, while moving support functions to lower-cost locations like Poland and India to cut costs.

A 36% drop in compensation at Deutsche Bank AG when adjusted for rising European wages was partly due to the 2010 acquisition of domestic retail bank Deutsche Postbank AG and the addition of 20,000 tellers, mortgage bankers and other lower-paid personnel. Deutsche Bank’s traders and bankers, once highly compensated, have seen their pay diminish over the past 12 years as well. The pay calculations take into account the nominal wage increase for the region where each bank is headquartered, which ranged from 17% to 30%.

An equities dealer who joined the company just before the financial crisis said his total compensation was about half of what it was in 2007 by the time he left at the end of last year, before Deutsche Bank announced it would close the division. The dealer asked not to be identified to avoid hurting his relationship with his current employer.

Cut in Half
His experience reflects the typical fate of sales and trading staff on Wall Street, according to Julian Bell, a managing director at Sheffield Haworth, a recruitment firm specializing in banks. Average compensation for mid-level employees in that business has been cut in half, to a range of $400,000 to $800,000, data compiled by Sheffield Haworth show.

Investment bankers had their pay reduced by about a third, with a mid-level banker now getting $600,000 to $950,000, Bell said. Compensation for managing directors has fallen roughly 30%, to an average of $1.5 million to $2 million.

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