Felix Salmon

Goldman’s gym tax

By Felix Salmon
August 12, 2010

Social Workout has photos from inside Goldman’s spanking-new 54,000-square-foot gym, but leaves the most interesting factoid in the comments. It turns out that being a Goldman employee might be necessary to gain entrance to the gym, but it’s not sufficient: you also need to cough up a monthly membership fee in order to gain access to those standard-issue Russell Athletic t-shirts and gray shorts. If you’re a managing director or higher, the fee is $132 a month; vice-presidents pay $75 a month; and everybody else pays $51 per month.

I’m wondering what the logic is here — is it a Pigovian tax aimed at minimizing the number of healthy employees? Is it an attempt to stop the unfit from complaining about having to cross-subsidize those who work out? Is 54,000 square feet not enough for the whole company, and the charge an attempt to keep numbers down? Or is it some misguided attempt at saving corporate cash, from a company which spent $2 billion on the shiny new building, including $5 million for a Julie Mehretu mural? All very odd.

5 comments so far | RSS Comments RSS

Maybe it’s to get around the fringe benefit tax that might otherwise be levied onto GS? 54,000 sq ft, while quite large, I don’t think is that large (not sure how many GS employees are at the Manhattan HQ) but just as an example, my gym is 130,000 sq ft but around 6-8am and 4-6pm, it’s packed to the gills. Now granted, a lot of that space is taken up by locker rooms, cafeteria, basketball courts, etc, but the space gets used up very quickly…

Posted by GregHao | Report as abusive

Yeah, my guess is it’s priced just about low enough not be a taxable benefit. The delightful cafeteria there also charges, though not excessively. Bloomberg, last I checked, was giving away its snacks for free..

Posted by gringcorp | Report as abusive

I think it has a lot to do with perception. I was at J.P. Morgan when Bear Stearns happened. I recall that the Bear gym was closed because it looked bad. The building was pretty much empty but the gym was gone because a free employee gym looks extravagant. Goldman can tell investors and clients that the gym is not free – it is priced similarly to other Manhattan gyms. So it is not client money (or fed bailout money when applicable) paying for the gym.

Posted by TurtleBay | Report as abusive

Wait wait, what’s the problem? In keeping with the times….the progressive gym fees are designed to charge people who make more, well, more.

Also, what’s with the assumption that if you work at Goldman and don’t use THEIR gym you are therefore unhealthy?

Strawman anyone?

Posted by derp | Report as abusive

The unfit and those who belong to other gyms or prefer to work out outside. It doesn’t seem unreasonable for this not to be free.

There’s also the standard behavioral reason, that asking someone to pay for something will make them more likely to actually use it than if they don’t. Not that Goldman traders are anything but hyperrational.

Posted by dWj | Report as abusive

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