A Goldman Sachs (NYSE:GS) pay cut has been issued as revenue fell, propelling the company to reduce the compensation and benefits of its traders and bankers.
The New York-based investment management company said that its compensation and benefits set aside for employees in its first quarter were reduced by 20% to $3.26 billion, amounting to roughly $90,780 for each of the bank’s 35,900 workers.
This amount came in at roughly $119,323 for each of the company’s 34,000 workers a year ago. Goldman Sachs plans on setting aside more in pay as the year progresses, which is key for senior traders and investment bankers as most compensation arrives in the form of late-year bonuses that are paid early the following year.
Compensation has been on the decline on Wall Street following the post-financial crisis rules that reduced risk taking. This is linked to the rise of automation and electric trading taking control of more flows from clients.
Goldman Sachs has been reevaluating all of its businesses since new CEO David Solomon took over in October, which has resulted in the firm pulling back resources on certain underperforming areas such as commodities trading. The company’s first quarter yielded revenue of $8.81 billion, falling 13% year-over-year and missing Wall Street’s guidance.
The company did manage to top Wall Street’s guidance on the earnings front at $5.71 per share, ahead of the $4.89 outlook. The amount did slide 18% year-over-year.
GS stock is down about 3.1% on Monday following the news.