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Goldman Beats Reduced Estimates As FICC Revenues Plunge 36%, Average Comp Run-Rate Of $494K/Year

Submitted by Tyler Durden on 10/19/2010 08:20 -0400

fixed
OTC

Goldman announced Q3 results, in which revenue beat recently dramatically reduced estimates, coming at $8.9bln vs. Exp. $8.03bln, as the earnings print at $2.98 was markedly better than consensus of $2.29. Yet aside from the pig lipstick, results were a material deterioration from the prior year period: Net revenues in the catch all Trading and Principal Investments were $6.38 billion, 36% lower than the third quarter of 2009 and 3% lower than the second quarter of 2010. And revenues in the all important Fixed Income, Currency and Commodities (FICC), aka "whatever we want OTC spreads group" were
$3.77 billion, 37% lower than a strong third quarter of 2009, "reflecting
a challenging environment during the quarter, as activity levels were
significantly lower compared with the third quarter of 2009. The
decrease in net revenues compared with the third quarter of 2009
reflected lower results in each of FICC’s major businesses, including
significantly lower net revenues in interest rate products and credit
products." And for all those looking for the direct impact of the Goldman reputational damage, look no further than here: "Net revenues in Equities were $1.86 billion, 33% lower than a strong
third quarter of 2009. This decrease primarily reflected significantly
lower net revenues in the client franchise businesses, principally due
to lower activity levels compared with the third quarter of 2009."

And some bad news for all those Goldmanites expecting record bonuses:

The accrual for compensation and benefits expenses was $3.83 billion for
the third quarter of 2010. The accrual for compensation and benefits
expenses was $13.12 billion for the first nine months of 2010, a 21%
decline compared with $16.71 billion for the first nine months of 2009.
The ratio of compensation and benefits to net revenues for the first
nine months of 2010 was 43.0% ⁽¹¹⁾ (which excludes the
impact of the $600 million U.K. bank payroll tax in the second quarter
of 2010), down from 47.0% for the first nine months of 2009.

Then again, Goldman did record that negative compensation accrual in Q4, in essence making the full year accrual lower than the 9 months ended Sept 30, 2009. Annualizing the current compensation accrual, results in $17.5 billion of full year payments. Dividing this number by the total staff of 35,400 (excluding associated entities), implies an average compensation of $494K per year. Of course, should Goldman not have a positive Q4 compensation accrual like last year, the total comp would be a paltry $370K per employee, which would likely result in a mutiny.

Full release

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Tue, 10/19/2010 - 08:26 | 660767 tunaman4u2

I hate GS

Tue, 10/19/2010 - 08:30 | 660777 cossack55

I hate JPM and in fact declared war against them. Due to no war declarations from CONgress for the last 69 years, I feel justified.

Tue, 10/19/2010 - 09:12 | 660867 Chemba

you "hate" GS.

well, I am quite certain that "GS" does not give a rat's ass whether you "like" or "hate" them.

what is it about "GS" that you "hate"? Is it the fact that they are a succesfull organization and you are a pathetic, ignorant loser, whose only goal day to day is to find someone to blame for your personal failure?

Tue, 10/19/2010 - 09:52 | 661002 Richard Chesler

If by successful you mean corrupt cheating bastards, then yes they are very "successful".

Tue, 10/19/2010 - 09:55 | 661008 MarketTruth

If you hate GS like i hate GS....

www.goldmansachs666.com

Tue, 10/19/2010 - 11:19 | 661297 SheepDog-One

The Mexican Mafia heroin trafficking ring is also a 'successful organization'. Your post as usual holds not a drop of water.

Tue, 10/19/2010 - 13:05 | 661719 erik

GS would be bankrupt if it weren't for the taxpayer bailout.

Some day, hopefully soon, these crimes will matter and we'll get a real leader who upholds the laws in this country.

Tue, 10/19/2010 - 08:35 | 660783 TheGreatPonzi

Crime pays.

Tue, 10/19/2010 - 08:36 | 660784 unwashedmass

crime does indeed pay in this grand country of ours now.

Tue, 10/19/2010 - 09:03 | 660841 kathy.chamberli...

white collar crime pays. i hear bank robbing is way down this quarter in net revenue compared to third quarter 09. just sayin.

Tue, 10/19/2010 - 08:42 | 660801 oh_bama

That means the lowest level analysts and associate level people gets about 200 more or less. I think it is fair market price for a demanding job in NYC.

having GS on your resume is priceless you can argue...

Tue, 10/19/2010 - 08:42 | 660802 SheepDog-One

All these banks look to be making KILL profits, so wheres the justification for any Q/E?

Tue, 10/19/2010 - 08:44 | 660805 Careless Whisper

they still make more money than any other hedge fund.

Tue, 10/19/2010 - 08:58 | 660826 Duuude

Tyler

Any idea if Hankster still gets a cut ?

Tue, 10/19/2010 - 09:06 | 660852 kathy.chamberli...

hankster the shankster

or......

hankster the prankster

or.................

hanking B whanking

Tue, 10/19/2010 - 09:18 | 660884 Jake Lamotta

GS is up nicely today boys & girlie's of ZH. Suck it up and face the fact that you have missed the biggest run up since August. Buy make a few bucks & sell.

NEVER HOLD ANYTHING CAUSE THE MARKET IS RIGGED!!!!!!!!!!!!!!!!!!

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Tue, 10/19/2010 - 12:47 | 661644 fuu