Tags: JPMorgan | Goldman | Sachs | 1 percenter

JPMorgan Report: Goldman Sachs Staff to Lose 1 Percenter Status

By Michelle Smith   |   Tuesday, 11 Sep 2012 11:37 AM

The top 1 percent of earners might be set to shrink as Goldman Sachs employees get reduced to the ranks of the 99 percenters.

The average compensation at Goldman Sachs is likely to fall by nearly $100,000 by the end of next year as new regulations, fewer deals and legal payouts hurt the firm's profitability, according to a report from the European division of JPMorgan Chase, Fortune reports.

Last year, the salary cutoff for the 1 percent was $368,000, according to Fortune. JPMorgan analysts expect Goldman's average salary to tumble to $314,000 by the end of 2013.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

Such cuts are not limited to Goldman Sachs, but appear to be very much the trend throughout the industry as the banking environment toughens.

Last month, Deutsche Bank announced it was cutting compensation to placate shareholders, according to Bloomberg.

The average investment banker at all firms will make $233,000 down from $303,000, before regulations, reports CNN Money.

“A few years ago, no one in the investment banking industry would dare cut compensation as they'd lose their talent,” Dirk Becker, an analyst at Kepler Capital Markets, tells Bloomberg.

Now pay cuts are a much easier decision. Firms are often under pressure from shareholders and the labor market is weak enough that employees are more likely to think long and hard before quitting in protest.

And the budget trimming does not stop there. Some people won't have to worry about considering whether or not to take a pay cut because their positions will be eliminated all together.

Deutsche Bank will cut about 1,900 jobs by the end of this year, according to Bloomberg, and Credit Suisse announced last year plans to cut 3,500 jobs and lower expenses by 2 billion euros. UBS also unveiled 3,500 job cuts last year.

As of the first quarter Goldman's staff had already shrunk by 2,000 in the past year, Fortune reports. And JPMorgan analysts believe Goldman is likely to cut an additional 4,400 people from its investment division.

Still, Goldman Sachs employees are expected to earn more than their peers at other firms and Credit Suisse is expected to rank second, according to JPMorgan analysts, who did not include their own firm in the assessment.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

© 2017 Newsmax Finance. All rights reserved.

1Like our page
2Share
392
2012-37-11
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved