Goldman Sachs said Wednesday its earnings fell 53 percent in the fourth quarter of 2010 as it set aside less pay for its staff, although bank employees last year earned more than eight times the average U.S. household income.
The bank said it earned $2.23 billion in the quarter after paying preferred dividends in the last three months of the year, down from $4.79 billion in the same period year earlier. On a per-share basis, the earnings came out to $3.79 per share versus $8.20 per share.
Goldman set aside about $15.38 billion for compensation expense in 2010 for its 35,700 employees, or 39.3 percent of its annual revenue. In 2009 it put aside $16.19 billion to pay 32,500 employees.
Revenue fell 10 percent to $8.64 billion. Underwriting fell 12 percent, while financial advisory services fell 7 percent on lower mergers and acquisitions.
Employees at Goldman earned an average of $430,700 each in 2010, down 13.5 percent from 2009 but still more than eight times as much as the average U.S. household income.
Goldman employees still look set to be among the best paid on Wall Street. JPMorgan Chase & Co paid its investment banking employees an average of $369,651, according to data the company posted on Friday.
Separately, a report on the New York Times Web site, posted Tuesday, notes that Goldman executives are poised to reap a windfall from nearly 36 million in stock options granted to employees during the financial crisis in 2008 — 10 times the amount issued the previous year.
When the options were granted the stock was trading at $78.78. However, since those days Goldman’s business has roared back and its share price has more than doubled, closing on Tuesday at nearly $175, the newspaper reported.
Wall Street compensation emerged as a hot-button issue in 2009 and 2010 as politicians, activists and others complained that banks privatized their profits and socialized their losses.
Goldman rival Morgan Stanley is set to release its compensation information Thursday when it reports its fourth-quarter results. Last year, Morgan Stanley's compensation pool was about $14.4 billion, about 10 percent less than Goldman's.
The median household income in the United States is just more than $52,000, according to the Census Bureau. In Manhattan, that rises to about $68,400.
The compensation of investment bank employees is a closely watched figure in New York City, both for the tax revenue generated by their substantial salaries and for the economic boost provided by their spending.
