Goldman plans to raise base wages under pressure from rivals: report
Goldman Sachs is considering raising the salaries of junior investment bankers to compete with rivals on Wall Street, as young staff complained they were exhausted from working long hours during the pandemic, when financial markets were exceptionally busy.
Investment banks have traditionally given big performance-based bonuses, but several US banks have switched strategies after a grueling pandemic period of trading.
According to Financial Time, some involved in Goldman’s internal debate fear they will no longer pay workers based on their performance, while others fear losing young talent to other big banks or the tech industry.
FORGET TO RETURN TO THE OFFICE, PEOPLE JUST LEAVE IN PLACE
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Citigroup was the latest to raise fixed salaries for the first-year investment bank’s analysis by $ 25,000, bringing their annual income to $ 100,000, excluding bonuses. He followed similar moves in June from JPMorgan Chase and Barclays, which raised base salary to $ 100,000 from $ 85,000. Bank of America and Wells Fargo also gave their first-year analysts a raise of $ 10,000 earlier this year.
Morgan Stanley and Goldman Sachs, however, did not follow the competition.
Speaking to staff members in a series of conference calls, James Esposito and Dan Dees, co-heads of the investment banking division at Goldman Sachs, said they were monitoring the salary developments of their rivals and were aware of the long hours employees worked during the pandemic, the Financial Times reported.
Esposito and Dees also promised younger staff that they would be handsomely rewarded amid the bank’s rising profits – but did not directly clarify a base salary increase. Goldman’s first-year analyst and associate salary runs out at the end of July, and all updated earnings will be released in August.
According to Wall Street Oasis, analysts and first-year associates at Goldman are already earning less than average compared to others on Wall Street. Goldman pays the early years an average salary of less than $ 86,000, with a bonus of $ 37,500 – compared to the Wall Street average of $ 91,400, with a bonus of $ 39,700.
Goldman Sachs CEO David Solomon has previously moved away from competing banks that have allowed a more flexible work week in the post-pandemic era, instead insisting on a return to the office, describing working from home as “a aberration which we will correct as soon as possible. “
Citigroup and UBS have given the green light to a hybrid return-to-work model, while Goldman, Morgan Stanley and JPMorgan have taken a tougher stance on returning employees to Manhattan offices.