July 19 (Bloomberg) -- Goldman Sachs Group Inc. set aside $8.44 billion for its compensation pool in the first six months of 2011, 9 percent less than in the same period a year earlier as revenue tumbled 11 percent.
The expense, which includes salaries, bonuses and benefits, was enough to provide each of the firm’s 35,500 employees with $237,662 for the six-month period, according to figures posted today on the New York-based company’s website. A year earlier, the firm set aside $9.3 billion for compensation, excluding a $600 million one-time U.K. tax on bonuses, or $272,581 for each of the 34,100 staff at the time.
Goldman Sachs, led by Chairman and Chief Executive Officer Lloyd C. Blankfein, 56, is among Wall Street firms seeking ways to curb costs as revenue from trading equities and fixed-income products drops for the second consecutive year. JPMorgan Chase & Co. reported last week that the compensation expense at its investment bank was unchanged for the first half of the year even though it employed 5 percent more workers and generated 6 percent more revenue than a year earlier.
“They’ve continued to streamline some of their costs,” said Douglas G. Ciocca, managing director at Kavar Capital Partners LLC in Leawood, Kansas, which manages about $225 million in assets, including Goldman Sachs shares. He spoke before the earnings were released. Still “you’ve got to make sure you retain the top people.”
Goldman Sachs’s pay expense represented 44 percent of revenue in the six-month period compared with 43 percent a year earlier. The same ratio at JPMorgan’s investment bank was 38 percent in the first six months of 2011, down from 40 percent a year earlier.
Average compensation figures are derived by dividing the overall compensation pool by the number of employees and don’t represent individual workers’ actual pay.
--Editor: David Scheer, William Ahearn.
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