Goldman u-turn sets tone

21 January 2010 By Margaret Doyle

Goldman is following Credit Suisse in letting the UK bonus tax dent payouts for some London bankers instead of spreading the full cost around the firm. That could give rivals a chance to poach talent. But peers won’t want to go against industry leaders as well as the public mood.

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Goldman Sachs said Londonbased partners would be "showing particular restraint" with their bonuses for 2009, after the Wall Street bank posted earnings showing that it would pay 35.8 percent of net revenues in compensation and benefits for 2009. The figure was the lowest compensation ratio since the Wall Street bank became a public company in 1999.

Bonuses above 25,000 pounds paid to all Londonbased bankers are subject to a oneoff 50 percent tax.

Credit Suisse said that it would cut its global bonus pool by 5 percent to reflect the UK tax. Its senior London staff are particularly hardhit, with 400 UKbased managing directors receiving bonuses that are 30 percent lower than they would have been.

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