Finance

Goldman Sachs hikes analyst bonuses after juniors complain of brutal hours

Goldman Sachs bolstered bonuses for its analysts, following a salary hike in August, making this year a bumper one for junior pay after complaints of brutal hours at the US bank sparked a burnout crisis and war for talent across the street.

Analysts at Goldman have received bonuses of between 100-110% of salary in 2021, according to people familiar with the matter, up from an average payout of 50-70% of base pay last year.

Goldman was among the last of the large investment banks to hike salaries for its juniors, raising first year pay to $110,000 in the US and £70,000 in the UK, up from $85,000 and £50,000 respectively in August. The new salaries are ahead of many rivals, which have largely increased salaries to £60,000 in the UK and $100,000 on Wall Street.

This would mean a total package of around £140,000 for first-year analysts at Goldman in 2021. Second year analysts are now paid salaries of $125,000 in the US and £80,000 in the UK.

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Those on the first rung of their investment banking careers are paid bonuses in August at many Wall Street firms including Goldman, while other employees receive variable compensation in January.

Goldman was contacted for comment.

Goldman wrangled over whether to hike salaries for juniors, the FT reported in July, as one bank after another raised pay throughout the summer. Instead, it was focused on hiring more junior staff and using technology to automate some of the drudge work.

However, in its second quarter results call, chief executive David Solomon hinted that Goldman would be more generous with its analysts this year. “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.” 

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The bank raised salaries on 1 August for analysts and first year associates.

A leaked presentation by 13 Goldman Sachs analysts in March highlighted how a deal boom was pushing an already difficult job into brutal 100-hour weeks. The analysts said their mental and physical health was suffering after a sustained period of long-hours as investment banking fees hit an unprecedented $60bn in the first half of 2021.

While some commentators have told Financial News that this is simply the reality of working in the industry that has always demanded long hours, banks have reacted to the latest burnout crisis. Banks have enforced existing time-off policies, shortened requirements for pitchbooks and rolled out new ‘disconnected’ holiday policies. Others, including Credit Suisse and Moelis & Co, have also rolled out one-time bonuses for their junior bankers.

To contact the author of this story with feedback or news, email Paul Clarke

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