Goldman wrangles over whether to pay junior bankers higher salaries

Goldman wrangles over whether to pay junior bankers higher salaries

Goldman Sachs executives are wrestling with the question of whether they need to bump up salaries for junior investment bankers this year to match rivals on Wall Street after younger staff complained they were burnt out.

Some senior executives have argued that boosting salaries mid-year would set a "dangerous precedent" and mark a break with the bank's "pay for performance" mantra, according to people briefed on the discussions.

Investment banks have historically avoided significant inflation in fixed salaries, which are harder to reduce in fallow periods. Instead, they tend to reward staff with bonuses that can vary dramatically from year to year depending on the performance of individuals and banks overall.

Nevertheless, several US banks have recently boosted guaranteed base pay for first-year investment banking analysts, including Citigroup, which last week offered an increase of much as $25,000 to take fixed salaries to $100,000 a year.

JPMorgan Chase and Barclays also lifted comparable salaries to $100,000 from $85,000 at the end of June, while Bank of America and Wells Fargo both gave their first-year intake a $10,000 raise earlier in the year.

That has left Goldman Sachs as one of the last remaining holdouts on Wall Street, setting off an internal debate about the right