– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
By George Hay
LONDON, Jan 19 (Reuters Breakingviews) – Goldman Sachs is taking its time, but it’s not clear why. Employees at the investment bank are usually told their annual bonus a few days before full-year results. But even though shareholders will discover the total amount spent on compensation on results day this Thursday, staff must now wait until next week to hear their individual windfall.
Goldman’s own explanation for the delay is that the welter of new regulations in 2009 has caused some slippage in working out individual bonuses. The G20 guidelines and the UK’s 50 percent tax on payouts over 25,000 pounds mean banks have new shackles, while Goldman’s conversion to a bank holding company means its financial year ends in December instead of a month earlier.
Maybe that’s the full explanation. But Goldman is not usually known for inefficiency. That’s why other theories are also going around. One is that the UK’s Financial Services Authority has thrown a spanner in the works. But the FSA has known the broad outlines of what Goldman was planning since early November. What’s more, Goldman has denied a rift with the regulator — and people familiar with the FSA’s thinking are downplaying the idea too.
Of course, the bank may simply be trying to manage the story. As the most notoriously profitable bank on Wall Street, Goldman will be acutely aware that it will face brickbats whatever it pays. If bankers were told their bonuses now, individual packages could leak out and Thursday’s results could disappear under a barrage of public outrage.