Its fiscal year coming to an end, Goldman Sachs (NYSE:GS) is about to post record annual profits less than a year after the peak of the credit crisis. It is as if almost nothing had happened. The bank’s trading desks and fixed income operations were barely affected by the global upheaval, and now the firm’s employees are about to get their rewards.
The latest estimates are that Goldman’s total compensation to company employees will total $22 billion, about $700,000 a person. That means that some of the most senior managers at the firm will make tens of millions of dollars.
According to The Telegraph, “The figures are likely to cause anger in America and Europe among people who are facing big cuts in public spending due to the amount of money governments have spent on bailing out the banks.” Goldman may not care very much about that and neither will most of its shareholders. The investment bank’s stock is up more than 100% this year, while many other bank stocks are still down.
Goldman is the prime example of whether or not the government is willing to leave alone those financial giants that are doing well, even if it is unpopular to see them pay out large bonuses, and focus on the really troubled companies like Citigroup (NYSE:C) and Bank of America (NYSE:BAC). If Goldman is treated like Citi, and Citi like Goldman, something really is wrong.
Douglas A. McIntyre
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