People walk in the Goldman Sachs global headquarters in Manhattan, New York
(Reuters) – Goldman Sachs has removed the cap on bonuses for its top bankers in the UK, according to a source familiar with the matter, months after the country axed the policy it had inherited from the European Union.
The cap sprung from a 2014 move by the EU, which the UK exited six years later, to try to deter bankers from the kind of excessive risk-taking that was blamed for the global financial crisis of 2008.
It limited bonuses to twice the basic pay if shareholders approved. However, banks often had to bump up the fixed salaries to circumvent the cap.
Goldman’s move would help it change the way it compensates its “material risk takers”, a class of employees whose performance can have a big impact on the bank, the source said, requesting anonymity as the details are confidential.
“This approach gives us greater flexibility to manage fixed costs through the cycle and pay for performance,” a Goldman spokesperson said.
“It brings the UK closer to the practice in other global financial centers, to support the UK as an attractive venue for talent.”
(Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York; Editing by Arun Koyyur)
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