Afternoon:
14°c
City bankers' £5m bonuses
Jonathan Prynn, Consumer Affairs Editor12.12.07
Dozens of London bankers at Goldman Sachs were today awarded bonuses of at least £5 million each.
Leading earners include Simon Dingemans, 44, Goldman's senior European mergers and acquisitions banker. He will get more than £10 million in a mixture of shares and cash.
The US investment bank kicked off the City's annual bonus season by telling their 5,000 staff how much they are getting for their performances this year.
Hundreds of top moneymakers at Goldman's Fleet Street offices will be getting £500,000-plus payouts after the company had an outstanding year advising on massive takeover deals.
Unlike most other investment banks it has avoided the worst of the global credit crunch. Its bankers, renowned in the City for being the smartest, guessed the US property market was heading for a fall in the spring and sold off much of their subprime liabilities to rival banks weeks before the mortgage market collapsed.
The payouts come as an Evening Standard poll reveals that most influential Londoners believe the City does not do enough to support good causes.
Goldman's London traders and bankers this morning filed into their managers' offices to be told how much they will be paid. "This year's bonuses are amazing," said one source. "There will be very few disappointed souls on Fleet Street today."
Employees are sworn to secrecy, mostly told that it is a sackable offence to tell colleagues how much they have earned.
Goldman Sachs is paying out a record bonus pool of £9billion across its global workforce, an average of £300,000 for every member of staff.
It has had a record year for advising clients on massive takeovers - one of the most lucrative areas of investment banking work.
High profile deals include the £11 billion merger of pharmaceuticals giants Alliance and Boots, the £64 billion proposed merger of mining giants BHP and Billiton and the £1billion sale of Countrywide Estate, Britain's biggest estate agency chain. It has also been advising the Government on the rescue of Northern Rock.
Co-chief executive in Europe Michael Sherwood, head of European investment banking Yoel Zaoui and investment banking managing director Karen Cook will also be rewarded with multimillion bonus packages.
Lehman Brothers tells its staff how much they have got tomorrow while Morgan Stanley declares on Friday. The other big Wall Street investment banks follow over the next few days.
Overall, the City's bonus pool is expected to be down on last year's record £8.6 billion because of the subprime mortgage disaster, which yesterday forced Swiss bank UBS - one of the City's biggest employers - to write off £5billion.
At other banks, mere survival will be seen as a bonus as the redundancy axe starts to fall. CIBC World Markets is reported to be sacking 60 London-based staff. There are also reports that Dresdner Kleinwort is axing 200 staff.
Reader views (1)
It's always interesting to see how much money people make in a single year from the developed world- I think the more the more the pie is shared out to the employees the better the productivity.
Most ironic to all this is just how difficult it is to raise capital for new businesses especially in the developing world- all this while people are raking in hundreds of thousands in bonuses.
It makes you wonder- is it all about the money? Money is great but few really make a difference with all that they have got.
- Emmanuel Kung'U, Nairobi, Kenya
