NEW YORK (Reuters) - Goldman Sachs Group Inc GS.N is likely to slash its chief executive's bonus from the record $67.9 million he got two years ago, but Lloyd Blankfein's pay package could still fuel criticism the bank has been "tone deaf" in its approach to the financial crisis.

Flags fly outside of the Goldman Sachs headquarters building in the financial district of New York January 21, 2010. REUTERS/Jessica Rinaldi

Efforts to deflect criticism and keep regulators at bay has already prompted Goldman to change its bonus strategy, curbing compensation in the fourth quarter of 2009 and eliminating cash bonuses for top managers, instead paying them in stock.

But Goldman still may face a storm of criticism when it announces the bonuses of its top executives even as it seeks to trim the headline numbers after a year of record profits. The announcement could come at any time.

“They have made a number of moves to try to ameliorate the issues,” said Alan Johnson, a Wall Street compensation consultant. “I would be shocked if it didn’t have an impact on his and everybody else’s total.”

Johnson estimated that Blankfein will get a bonus of more than $40 million for 2009, a year in which Goldman reported record earnings of $13.39 billion.

That would fall well below the $67.9 million he received in 2007. Blankfein took no bonus in 2008 during the worst of the financial crisis.

The Times of London reported on Monday that Blankfein could receive a bonus of up to $100 million, thumbing his nose at President Barack Obama and his recent crackdown on the banking industry. The newspaper cited bankers who were in Davos, Switzerland, for the World Economic Forum as its sources.

Goldman spokesman Lucas van Praag denied the report, calling it “speculative nonsense,” although he acknowledged that Goldman’s board had yet to make a final decision on executive compensation.

A separate report in the Wall Street Journal said at least one unnamed London banker in Davos was willing to wager millions of pounds that Blankfein, a staunch defender of Wall Street, would be out of a job within two years -- an anecdote that van Praag called “effluent.”

SIDESTEPPING CONTROVERSY

The reports on Blankfein and Goldman’s quick retorts underscore the sensitivities at play.

“Underneath that cool exterior, it is apparent that there is some very great sensitivity at Goldman about executive compensation these days,” said Scott Tangney, a consultant with public relations firm Makovsky + Co, who added that he expects Goldman to pay Blankfein at a lower level than 2007 and other years.

“Because of the government pressure and the public scrutiny, it has already forced Goldman to handle executive compensation in a very different way.”

Goldman last month sidestepped controversy over its ballooning bonus pool by cutting off compensation after three quarters and giving $500 million to charity. Before the shift, Goldman was on pace to surpass its record payout of $20 billion in 2007. But the actual figure was $16.2 billion.

While political pressure could affect high-profile executives like Blankfein, it leaves open the possibilities for outsized paydays for lesser-known executives and star traders who helped the firm set a record profit in 2009.

In 2008, when most of Wall Street was at death’s door, 953 Goldman employees made at least $1 million apiece, according to a report by New York Attorney General Andrew Cuomo. There were 21 Goldman employees who made at least $8 million each.

For 2009, executives like David Heller, Harvey Schwartz, Edward Eisler, and Pablo Salame, all of whom lead units that oversee bond, stock, currency and commodity sales and trading, could see mega payouts after the firm reported $23.3 billion in revenues from fixed income, currency and commodities trading in 2009, up from $3.7 billion in 2008.

Paydays for them of more than $20 million each would not be surprising, headhunters and recruiters said.

Richard Lipstein, a recruiter at Boyden Global Executive Search, said he would expect “a huge payout for their stars.”

Goldman’s bonuses are expected to come largely in stock rather than cash, following a trend on Wall Street to change pay designs and curb risk-taking.

Still, those changes are likely to fall on deaf ears to an angry public focused on the big numbers, said Sarah Anderson, a fellow with the Institute for Policy Studies, which is critical of Wall Street, and co-author of the recent study “America’s Bailout Barons.”

“They are claiming to have made changes, but for the ordinary taxpayers who have contributed very much to the recovery of the markets, they aren’t seeing it as substantial change,” Anderson said. “They are seeing it as business as usual.”