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Please, Sir, I Want Some More.

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Because of its reputation and the incredible riches that came with making partner, Goldman used to enforce tight discipline in compensation. But the industry is more competitive now, and the firm has to fight along with everyone else to keep its top producers. One current EMD told me that Goldman is now prepared to pay its top traders 10 to 15 percent of the profits they make for the firm, a stark reversal of long-standing policy and a direct counter to the siren song of hedge funds. “There was always an implicit understanding that if you made $100 million for the firm, the last $50 million of it was a waste of your time—they were never going to pay you more than a certain amount,” says one former trader for the firm. “But that’s all changed now.”

In Goldman’s offices around the globe, but especially inside the gilded walls of 85 Broad Street, the annual bonus dance is about to reach its climax. On the day they’re told their numbers, those who are richly rewarded will do their best to contain the feeling that comes along with being $2 million, $10 million, or even $40 million richer. And what of those who get the shaft? “They try to be professional,” says the former EMD. “Although you can see from their trembling lips or the intensity of their stare that they’re disappointed. They’ll go out to their station, slam a few things down, grab their coat, and walk out. Some of them won’t come back for several days.” At which point, it will nearly be 2006, with the meter running on next year’s bonus.

Next:The Goldman Sachs Diet


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