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It’s very common for analysts and journalists to divide the total compensation accrual at firms by the number of employees, producing an average pay per employee. Goldman shed about 3,000 employees this year, reducing its headcount to 32,000. That produces an average pay per employee of $135,123 for the first three months of the year, an 8.6 percent decline from last year’s first quarter number of $147,825.
In other words, Goldman is setting aside less money for each of its employees.
But this metric is somewhat misleading. Goldman employees are not paid equally. There really is no “average” Goldman employee. The total headcount includes both full-time employees, contractors and part-timers. Secretaries and janitors are lumped in with investment bankers and commodity traders.
A better metric for judging evaluating Goldman’s compensation scheme is probably compensation per partner. Judging by this measure, Goldman’s compensation scheme did not shrink by as much as the raw numbers indicate. In fact, it barely shrunk at all.
In last year’s first quarter, total compensation divided by partner equaled close to $10.83 million. This year, the compensation per partner is roughly $10.76 million for the first quarter. That means that comp per partner decreased by just 0.64 percent.
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