Goldman Sachs slashes bonuses to a mere £300,000

The Wall Street giant today cut year-end payouts as a result of Alistair Darling's banker tax and to show "restraint" in the recession.

But the bank still provoked outrage by revealing its 32,500 staff — more than 5,000 of them in London — will get an average $500,000 (£309,000) even after hacking back bonuses.

TUC general secretary Brendan Barber said: "Goldman Sachs wants us to believe its bonuses are modest. But the truth is we have set up an international welfare state for super-rich bankers.

"They pay themselves mega-bonuses in good times and expect the rest of us to bail them out when times are tough, even though it was the finance sector that threw the world into recession."

Goldman said it had put aside £10 billion to reward its employees worldwide for their performance in 2009 — less than expected but still up by half on 2008. But in a landmark move, all its senior executives around the world will take a cut that could cost some individuals millions of pounds. London-based bankers will suffer the most because of the 50 per cent bonus tax.

The bank also said it had paid $500 million to a charitable fund and reduced the ratio of its revenues handed out as pay and bonuses to the lowest level since it became a public company in 1999.

Chief financial officer David Viniar said the cuts could result in a flight of talent as bankers sought higher rewards elsewhere.

The decision comes two days after Credit Suisse said it would slash bonuses by 30 per cent for its top 400 earners.

The bonus cuts for the City's "masters of the universe" come amid public revulsion at the size of payments to financial institutions bailed out by taxpayers.

US President Barack Obama has called them "obscene" and London Mayor Boris Johnson has urged global banking chiefs to rein in "excessive" payments.

Mr Johnson and the shadow chancellor George Osborne today warned bankers they should not "sit tight" until after the general election and assume the Tories would take a softer stance on pay and perks in the City.

Rival investment banks JP Morgan and Morgan Stanley told staff the size of their bonuses yesterday. Both have reduced their global bonus pools as a direct result of the 50 per cent banker tax announced by the Chancellor last month in the pre-Budget report.

Despite the cutbacks, thousands of London bankers are still set for vast payments in coming weeks.