Goldman Sachs CEO David Solomon to halve partners’ bonus pool

Goldman Sachs CEO David Solomon seems to have put the firm’s esteemed partners on his “naughty list” this year.

The Wall Street tycoon will shrink the bonus pool for the roughly 400 partners by as much as half, according to a report.

While the decision won’t be finalized until the end of the year, the move to cut back on compensation is part of Solomon’s larger effort to boost shareholder returns as Wall Street profits slump, Semafor reported Friday.

The Goldman partners — who will receive bonuses at the beginning of the new year — typically receive compensation in line with the prestigious firm’s revenues. But the reported decrease in bonuses would dramatically outpace the firm’s roughly 20% dip in revenue year over year.

The move comes as banks across the industry cut back. Wall Street giants JPMorgan, Bank of America and Citi are planning to cut their bonus pools as much as 30% as the economy tightens and layoffs loom after more than two years of industrywide talent shortages.

It’s not just underperforming divisions that are facing smaller bonuses. At Goldman Sachs, traders are facing cuts to their bonus pools even though the global markets division brought in $25 billion in 2022 — a 15% increase in revenue from 2021, Bloomberg reported.

Investment bankers will likely be hit hardest — with their bonuses slashed by as much as a third as banks brace for revenues to plummet as much as 50% in 2023. Some mid-level and low performers in finance may not get any bonus at all — a painful hit given that most compensation on Wall Street frequently comes from bonuses.

Many on Wall Street are grateful just to hold on to their jobs. Employees at Goldman Sachs, Morgan Stanley and Wells Fargo have faced an annual culling. Insiders fear the job cuts could just be beginning.

Earlier this week, Solomon signaled he’s sharpening the ax again and could further slim down “the footprint of the organization.”