Goldman Sachs chief executive David Solomon hinted that the bank could soon give a pay boost to its junior bankers, saying the bank is a “pay for performance” organisation and that “we are performing”.
The US bank has so far resisted hiking base salaries for its younger bankers, even as rivals Bank of America, Citigroup, JPMorgan and Barclays have all raised pay for juniors in recent weeks, amid a burnout crisis and talent crunch in the sector. $100,000 starting salaries for first year analysts have now become the norm, while pay has risen for analysts, associates and vice presidents in the sector.
“We have always paid very competitively,” Solomon said in response to an analyst question about a possible pay rise for juniors during its second quarter earnings call. “We’ve always been a pay-for-performance organisation; we are performing, we have a normal pay cycle for analysts and that normal pay cycle happens to be in August.”
Goldman, like many US investment banks, pays junior banker bonuses in August, out of kilter with some rivals and its own regular bonus payments for more senior employees in January.
A group of 13 analysts at Goldman Sachs leaked an internal presentation in March, outlining 100-hour weeks and declining mental health. The deck, which pitched for 80-hour weeks, has created a domino effect in the industry, with the vast majority of banks raising pay and shaking up working practices for their juniors, as well as rolling out one-time bonuses.
While Goldman has increased recruitment of juniors and looked to automate more elements of their work, it is one of a handful of banks that has yet to budge on compensation. The US bank has just unveiled a record start to the year for its dealmakers with $3.6bn in fees in the second quarter.
“We continue to thrive by having the best people here, and paying them appropriately — especially when we perform, and we’re performing,” Solomon said. “I would tell you to expect to see us pay appropriately during our normal cycle.”
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