Goldman Sachs ponders $1bn charity donation


The investment bank, which is set to report its results for the three months to September on Thursday, is understood to be giving serious thought to some form of large philanthropic donation.

The aim of the donation, first disclosed by Henry Blodget's Business Insider blog, would be to deflect the likely row come at the end of the year. By then Goldman's total compensation pot is expected to be a record $22bn, delivering average pay and bonuses of more than $700,000 per employee, higher even than the average $661,000 paid out in 2007 – its last record year.

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The bank's partner managing directors – a top-tier of approximately 300 senior bankers who tend to be its biggest money-earners – are believed to be discussing the plan as one of a number of ways of deflecting political and investor backlash over the eventual size of the bonus pool.

Goldman has repaid $10bn of funds received from the US Treasury's Troubled Assets Relief Programme, but politicians are likely to question whether the bank could have made such spectacular profits without taxpayers assistance.

Meanwhile, Goldman shares fell $3.72 – or 1.96pc – to $186.43 after banking analyst Meredith Whitney downgraded its shares from "buy" to "neutral".

Ms Whitney said Goldman's shares had risen 34pc in the last quarter – past her $186 price target – but stressed that the "strong fundamentals behind our upgrade last quarter still stand".

A Goldman spokesman said: "We don't make decisions about any major expenditure or commitments until the end of the year."

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