Give and Take

Big banks are working to cap employee bonuses in the face of a $117bn federal tax and public fury over record payout amounts. “Wall Street banks plan to highlight caps on cash bonuses and cuts in the proportion of revenues paid out to employees in a rearguard action against the public and political assault on their bumper pay-outs. Executives at the largest US banks, led by Goldman Sachs, are spending the long weekend putting finishing touches to financial reports for 2009, which will reveal whether the annual bonus season lives up to its billing as the most expensive on record. Goldman Sachs, which has become a lightning rod for public fury over the taxpayer bailout, has slashed the money going into its bonus pool in an attempt to keep pay-out levels below their 2007 peak, analysts believe. And investors were quietly betting last week that the proportion of revenues handed to staff could turn out to be lower than published estimates, as banks strive to boost profits in the face of disappointing results from their trading operations in the fourth quarter of 2009.”