Morning Coffee: 11 people at Goldman Sachs in London are earning £14m (at least). What former traders really do next

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Anyone who thinks that everyone who works in an investment bank is earning an enormous amount of money, is wrong. Some people in investment banks are paid an enormous amount, the rest are paid well but not superlatively. This applies to Goldman Sachs as much as the rest.

Newly released figures for 2015 pay at the top of Goldman's London pyramid confirm the reality. The bank's Pillar 3 report for 2015 shows that Goldman Sachs UK paid 512 key staff in London combined cash and stock worth around €1.1bn (£920m/$1.2bn) last year; an average of £1.9m ($2.5m) per head. That's pretty impressive given that Goldman Sachs International (mostly comprised of the UK business) paid its entire 6,149 employees a 'mere' $2.8bn for the same period. - It looks like around 8% of the staff at Goldman's London office received around 42% of the pay.

The skew towards the top doesn't stop with those 512 high earners though: the real story is orientation of pay to a few people within that select group. As the chart below, taken from Goldman's Pillar 3 report, shows, only 286 people of the 512 earned more than €1m. 11 people earned more than €9m (£8m).

How much more? Assuming that everyone below them was paid at the upper end of the payment bands (unlikely), Goldman had a pool of €183m to distribute between those 11 highest earners in London. The implication is that they each earned €16.6m (£14m) at least. They likely took home far, far, more than that. Working for Goldman Sachs always pays, but for some people it pays a lot more than most.

Pay distribution at the top of Goldman Sachs UK:

Goldman Sachs pay London

Source: Goldman Sachs UK

Separately, what do you do when you've lost your job as a senior FX trader? How about taking up a new position teaching other people how to trade?

The latest ex-trader to follow this well-worn path is Perry Stimpson, the former Citi FX trader who just won $83k from his former employer for wrongful dismissal. Bloomberg reports that Stimpson is, 'a vice president for Traders4Traders, a start-up offering online courses for people interested in learning about the foreign exchange business.' Stimpson doesn't draw a salary unless the company makes a net profit of more £20k a month, which has yet to happen.


Morgan Stanley pays its average City of London top earner £1m. (WSJ)

Banks have had their bonuses capped in London, asset mangers have not. The average asset management CEO received a bonus 15 times larger than his salary last year. (Financial Times) 

Melissa Tuttle, head of Pimco's equities business is leaving. This is unsurprising given that whole areas of the business are being closed down. (The Trade News) 

With luck, there will be a lot of M&A deals after Labor Day. M&A bankers need them. (Bloomberg) 

“In Holland and Italy, it’s fairly normal to wear brown shoes but here it’s like a little bit of history. The first time I came here I felt like being the Dutchman and just saying, ‘f*ck it’ and wearing the brown shoes. It’s not accepted in London, not yet." (Guardian) 

When company careers pages are a turn-off. (Medium) 

Hugh Hendry, sophisticate, rebel. (Business Insider) 

"Deutsche Bank pays me and will pay me in the future; it holds my pension; its name is all over my CV; and to top it off I’m long a ton of stock in deferrals. The only way I could get any longer of Deutsche Bank is if they kidnapped one of my kids each time we have a down quarter”. (Screaming and Shouting)


Photo credit: Walkway by Stewart Morris is licensed under CC BY 2.0.

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