Goldman Sachs is reportedly shrinking the size of its new class of partners, with plans to add no more than 60 partners this year.
The number of people to be promoted as partners next month may be the smallest since the mid-1990s.
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According to The Wall Street Journal, the partners will get carried interest – a cut of profits taxed at low rates in four of the bank’s private investment funds.
Goldman Sachs will lend up to half a million dollars to the partners to boost their personal investment, stated the report citing people familiar with the issue.
Those at the partnership ranks are considered to be one of the most elite employees of the bank and typically fetch salaries of nearly $1m.
However, the bank has made pay cuts following the financial meltdown, as a result of which the bank reportedly paid its staff 35% of its revenue in 2019 compared to 42% in 2011.
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By GlobalDataThe partner headcount was around 220 when the firm launched an IPO and at its peak, the number increased to more than 500.
The bank appointed 114 partners in 2000, replacing people retiring with their IPO profits, and 115 during the 2006 trading boom.
However, in his first selection process in 2018 as Goldman Sachs chief, David Solomon tightened the list, promoting only 69 partners.
Goldman did not comment on the report.
Developments at Goldman Sachs
Goldman Sachs was recently in the news for reshuffling its business lines, resulting in changes in its leadership ranks.
The bank also heaved a sigh of relief as Malaysian authorities dropped criminal charges against its three subsidiaries for their role in the 1MDB Malaysian state fund scandal.
To resolve the 1MDB allegations, Goldman Sachs finalised a $3.9bn agreement with the government of Malaysia.
The settlement includes a $2.5bn cash payment to Malaysia and a guarantee to return at least $1.4bn in proceeds from 1MDB-related assets.
