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Goldman Sachs Bonuses to Be Largest in Company History

June 22, 2009

Suzanne Heibel--HispanicBusiness.com

Employees at Goldman Sachs Bank are scheduled to be given the largest bonuses in the company's 140-year history, according to the UK Guardian. The Guardian reported that "a lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring," prompting the company to inflate employee bonuses and salaries. Analysts are worried that these big payouts will ultimately thwart financial regulation reforms, since oversized bonuses were a key aspect in the banking industry's collapse, according to the Cleveland Leader.

Goldman Sachs had previously received $10 billion from the Federal government's Troubled Asset Relief Program (TARP), but the company paid it back in full on June 17. Because the bank has paid back its borrowed capital it is free to function independently of government-imposed bonus caps.

On June 10, President Barack Obama appointed Kenneth Feinberg as the official "pay czar," a position meant to keep an eye on financial institutions that have received compensation from TARP.

Source: HispanicBusiness.com (c) 2009. All rights reserved.