Golden Sacks: 57% pay rises for staff at Goldman Sachs... as bank claims it showed 'restraint'



£10bn pot is us showing restraint, says bank chief

But Obama warns: I'll fight this culture of greed

Goldman Sachs was accused of living in 'Alice in Wonderland world' last night after claiming it had showed restraint in awarding its bankers a 57 per cent jump in their pay packages.

The average employee at the giant investment bank scooped £308,000 in salary, bonuses and other benefits in 2009, which is £112,000 more than they got the previous year.

There was anger that staff at the firm nicknamed 'Golden Sacks' had won the jackpot while millions of ordinary workers pay a heavy price for a recession widely blamed on the irresponsible actions of the banking industry.



Pay day: The Goldman Sachs office in Fleet Street, London, where bankers willl receive a 57 per cent jump in their pay packages

The huge rewards were revealed on the day that President Obama launched a campaign to rein in reckless U.S. banks. He said they will be forced to abandon their 'casino-style' bets on financial markets.

He also believes they have grown too large and some may have to be broken up.

In a sign of his determination, Mr Obama said: 'If these folks want a fight, it's a fight I'm ready to have.'

Last night Shadow Chancellor George Osborne said that if the Conservatives win the General Election they will copy U.S. plans to limit the size of banks. The Treasury said it would consider President Obama's comments 'very carefully'.

Announcing the pay and bonus figures, Goldman Sachs's chief financial officer David Viniar repeatedly insisted that the U.S. bank had shown 'restraint'.



He said it had donated £320million of its bonus pot to charity, while Britain's new supertax on bonuses means that Goldman's 5,500 London staff are getting smaller payouts than counterparts elsewhere.

Angry: A protester demonstrates outside the headquarters of Goldman Sachs in New York yesterday

He said: 'We are not blind to the economic environment and the pain and suffering that is still going on around the world.



'We're not deaf to the calls for restraint. We heard them.'

In total, the bank paid out £10billion in salaries, bonuses and other benefits in 2009. This is equal to an average of £308,000 for each member of its workforce, which has shrunk to 32,500 over the last year.

In 2008, the total figure was £6.75 billion, or £196,000 per worker. By comparison, workers in the British private sector earn an average of £25,000, and many were hit by pay cuts over the last year.

John McFall, a Labour MP and chairman of the influential Treasury Select Committee, said he was 'incredulous' at the size of the Goldman Sachs handouts.



He said: 'People will think they're living in Alice in Wonderland world.'



Brendan Barber, general secretary of the Trades Union Congress, said: 'Goldman Sachs wants us to believe that its bonus payouts are modest.



'But the truth is that we have set up an international welfare state for super-rich bankers.



'They pay themselves mega-bonuses when times are good and expect the rest of us to bail them out when times are tough, even though it was the finance sector that threw the world into recession.'



London-based bankers at Goldman Sachs are expected to bear the brunt of Britain's 50 per cent supertax on bonuses over £25,000.



Mr Viniar said the impact of the bonus tax could run into 'several hundred million dollars'.



But the payouts will still appear enormous to anybody who does not work in the banking industry, with many scooping seven or eight-figure handouts. Staff will find out the exact size of their bonuses next week.



Overall, yesterday's figures from Goldman Sachs showed it enjoyed net profits of £8.3billion last year, nearly six times more than the previous year.



LibDem Treasury spokesman Vince Cable said: 'Barack Obama understands that the bonus culture in the banking system has got entirely out of hand and must be curbed.



'The days of excessive risk-taking on the back of taxpayers' money must stop now.'



He is calling for British banks to be broken up to ensure that taxpayers are not forced to underwrite unnecessary risks, and to make the system more competitive.

