As Goldman Sachs reveals that staff earned £8bn in pay and bonuses in 2011, anti-capitalist protesters lose their court battle to occupy land outside St Paul’s cathedral in London.
Goldman Sachs‘ total pay packet including bonuses was 21 per cent lower than in 2010, with staff earning an average of £239,000 each. However, the American investment bank, which employs 33,300 people, 5,300 in the UK, saw its profits fall by 47 per cent to £2.8bn in 2011.
David Hillman, spokesperson for the Robin Hood Tax campaign, said: “When even in a bad year each Goldman employee pockets an average of $367,000 – nearly ten times the average UK salary – it’s proof that banks live in a parallel universe to the rest of us.
“Governments should bring banks back down to earth and ensure this money is used to help not those who caused the financial crisis, but those feeling its effects.”
After a five-day court hearing, the High Court granted orders for possession and injunctions against Occupy London protesters, who have been camped outside St Paul’s cathedral since October and will now have to move.
The occupation led to the closure of the cathedral at the end of last year, the first time St Paul’s had shut its doors since the Second World War. The Corporation of London said there was an “overwhelming” case for the court’s intervention because of the impact on the area.
Occupy is not just a camp, it’s an idea. Spyro van Leemnen, Occupy London
Occupy London spokesman Spyro van Leemnen told Channel 4 News the group would decide what to do next at a meeting on Wednesday evening, but he said the court’s decision only related to land owned by the Corporation of London, not the cathedral.
He said an appeal might be launched, adding: “Despite the fact we are disappointed, we are quite optimistic because Occupy is not just a camp, it’s an idea. Even if we’re evicted, the idea is still strong and growing because it represents something people can identify with: economic justice.”
In December, Occupy Wall Street protesters wearing squid costumes marched to the Goldman Sachs headquarters to protest about the amount of tax the bank pays. The squid emblem was the result of an article in Rolling Stone magazine which compared Goldman Sachs to “a great vampire squid wrapped around the face of humanity”.
The £8bn awarded to Goldman Sachs staff is substantially lower than the £18.9bn that employees at American bank, JP Morgan Chase, will share.
Royal Bank of Scotland (RBS), which is 82 per cent owned by the taxpayer after being bailed out in 2008, paid out £1bn in bonuses in 2010. The expectation is that the 2011 bonus pot will be half this – £500m. But chief executive Stephen Hester is in line for as much as £1.2m million.
Barclays, which did not need to be bailed out during the credit crunch, is believed to have made bonus payments of £2bn in 2010. This figure is also likely to fall.
The Sunday Times has reported that chief executive Bob Diamond, once dubbed the unacceptable face of banking by former business secretary Lord Mandelson, could receive a £10m bonus on top of his £1.3m salary.
At Lloyds Banking Group, in which the government holds a 41 per cent stake, chief executive Antonio Horta-Osorio has said he will forgo his £2.4m bonus after taking a two-month leave of absence from work. His basic salary is £1.1m.
In 2009, 2,800 bankers working in London for 27 banks received more than £1m each in bonuses. The issue of bonuses and executive pay has become a sensitive political issue since the government spent £66bn bailing out RBS and Lloyds. Prime Minister David Cameron has suggested shareholders should be able to veto pay deals.
Research from the Institute for Public Policy Research think tank suggests that chief executives in many of Britain’s biggest companies received an average of £5.1m in pay, bonuses, shares and pension contributions in 2010-11. This represents an increase of 33 per cent, at a time when average earnings growth is well below inflation at 2 per cent.
Bank of England Governor, Sir Mervyn King, told MPs on Tuesday that banks should not award big bonuses to their best-paid staff. “The reputation of those institutions will be affected if their senior executives reward themselves, particularly in a period when the banks, in terms of their share prices, have hardly been stellar,” Sir Mervyn said.
In 2009, the then chancellor Alistair Darling announced a one-off, 50 per cent tax on bonuses of over £25,000 at 26 City institutions. It raised £2bn. Goldman Sachs said it paid £300m in bonus tax in 2010.
Labour would like to see the tax re-introduced, but the government has replaced it with a permanent levy on bank balance sheets, which it says will raise £2.5bn a year.
The Centre for Economics and Business Research has carried out research which shows that bonuses hit an all-time high of £11.5bn in 2007-08, while in the last financial year, payouts totalled £6.7bn. It expects bonuses to fall again to £4.1bn by the end of the current financial year.