Usually, you’re pretty much home free when you become an equity partner at a top financial firm. But not at controversial investment bank Goldman Sachs, where a raft of partners get culled every two years to make way for new blood. And this year, that cull looks set to be even more brutal than usual: the recession has meant that the level of partner churn has been much lower than the typical 15-20%, so a lot of very rich bankers are currently getting all sweaty-palmed at the prospect of some swingeing cuts...
Of the firm’s 33,000 staff, there are only 400 partners – and they're the ones who take home the biggest share of the bank's massive bonus pot. The company’s $16.2bn bonus pool this year worked out at roughly $498,000 (£331,756) per employee – but in practice, this will be heavily skewed towards the partners, who can take home millions each. So we doubt these poor souls will attract a lot of sympathy now; even if they do face the chop, they should have a fair bit put by to pay the kids’ school fees.
Then again, these are turbulent times for the world's most powerful investment bank, of course. On Sunday, chief exec Lloyd Blankfein was reported to have come close to reaching a $1bn (£675m) settlement deal with the US Securities and Exchange Commission (SEC), which made allegations last month that Goldman had misled investors over a product it sold them in 2007. This led to an appearance in front of a Senate committee, and a media storm that has already wiped a fifth off Goldman's share price. Then there's the increasingly imminent threat of it being regulated to within an inch of its life by the US authorities.
We can't imagine the prospect of firing lots of his top brass is a particularly pleasant one for Blankfein. But if nothing else, it may be a chance for him to draw attention away from the trading side of the business, which has ruled the roost at Goldman in recent years but has got the blame for much of its recent travails. During the last round of partner promotions, more than 40% of new positions went to overseas staff - a way of stressing the bank's international credentials. This time round, the FT suggests the emphasis could be on investment bankers (rather than traders), to stress Goldman's deal-making expertise.
Of course, there's a chance that Blankfein himself might not be around for much longer: after all the drama of the SEC allegations, some investors are calling for him to throw in the towel. So while these Goldman partners shouldn't expect much external sympathy (does anyone really care if a load of bankers who are rich enough never to work again get the boot now?) – here's a thought that should at least provide some consolation: the guy who's giving them the chop may face the axe himself before too long.
In today's bulletin:
Brown resignation sends pound plunging as investors fear power vacuum
Unite seeks BA negotiations - by announcing 20-day strike
RBS cuts 2,600 jobs - and high street suffers
Goldman to cull dozens of partners?
The Parent Project: The new rules of commuting