Goldman Sachs Slashes Number of Firm's Partners

Is this a sign?

Are the bankers anticipating a Democratic rout and circling the wagons in expectation of more privations to come? Or are they signalling a Romney victory and simply want the spoils spread to a smaller group of beneficiaries? Or neither...

Goldman Sachs has lost or cut 33 partners since it last reported. Since the data cover the past year, there appear to be a couple of interesting developments. First, it seems that some partners either left because they thought it was time to cash out - or at least some of them were pushed in order to reduce the drag on profits that enhanced regulation presents.

The juiciest tidbit of all, however, may be that some partners demoted themselves, reducing their partner-level take - but still assuring themselves of a princely income at slightly lowered status. Which would be a smart move in the face of further staff reductions on Wall Street and in London's City.

The guessing here is that Goldman partners, who are nothing if not facile with numbers, have run same and concluded that happy days are not here - at least for the likes of them - and so are 'right-sizing' so that the distribution of spoils for those who survive is not diminished - too far from what is required for the Master of a Somewhat Smaller Universe.JL

Dominic Rushe reports in The Guardian:

Goldman Sachs has dropped 33 partners since it last disclosed the number of elite bankers at the firm, according to regulatory filings. Being a Goldman partner is one of the most coveted positions on Wall Street, unlocking access to a lucrative compensation scheme on top of the prestige the title holds. The bank's partners own more than 11% of shares between them, valued at more than $6bn (£3.7bn).

But as Goldman looks to slash costs, it has cut partners. According to the outgoing chief financial officer, David Viniar, up to 20% of Goldman partners typically leave every two years. High-profile partners including David Heller and Ed Eisler, two co-heads of Goldman's securities business, and Lucas Van Praag, the bank's long-time communications chief, have left the bank.

Some partners appear to have chosen to drop their coveted status in favour of retaining their jobs. Since the end of 2010, the bank has cut more than 3,000 employees worldwide as it seeks to reduce annual expenses by $1.9bn.

According to the regulatory filing the bank has 407 partners, with 33 people dropped from the list since February. Two bankers, Mark Schwartz, chairman of the company's Asia-Pacific region, and Richard Phillips, a specialist in natural resources mergers and acquisitions, were added to the latest filing.

Goldman selects new partners every two years. It named 110 in 2010 and is to announce its latest partners on 14 November.

Goldman's revenue more than doubled in the previous quarter, to $8.35bn, from $3.59bn during the same period a year ago. It has set aside $10.97bn for compensation this year, up 10% from a year ago. The sum equates to $336,442 per employee, up 15% from $292,836 per worker during the first nine months of 2011.