Goldman Sachs has throttled back its bonus pool in the face of political pressure, setting aside a record low of 36 percent of company revenues for compensation. Employees will receive an average of $498,000 for 2009, well above the $317,000 they received in 2008 during the depths of the financial crisis, but the total compensation pool of $16.2 billion is well below the record $20.2 billion from 2007.



The move is the latest in a series of steps that Goldman has taken to improve its public image, from a $500 million fund for small businesses to restricting its top 30 executives to stock-based bonuses with a five-year lockup. Such moves -- while understandable in a year when your company has been likened to a vampire squid -- won't slake public anger at the bank's outsize profits, which totaled $4.95 billion in the fourth quarter. A protest is scheduled for the company's headquarters on Thursday, smaller bonus pool notwithstanding.

"Goldman Sachs is not a banking or financial story now, it's a political story," portfolio manager Matt McCormick told Reuters.

That's especially true as President Obama prepares to announce a Wall Street crackdown, especially on Goldman's specialty, proprietary trading -- that is, trading for your own accounts rather than your clients'. Goldman will almost certainly be forced to make changes due to Obama's proposal, either by ramping down the risks it takes, firewalling its own trading activities from those of its clients, or shedding its newly acquired commercial bank status.

Goldman watchers will have to wait a bit longer to see how the bank adjusts -- and also to find out how much CEO Lloyd Blankfein will get. He got a record $68 million in total compensation in 2007, and took no bonus in 2008. His 2009 bonus will come all in stock, but it will still be an eye-popping number.

