Goldman Sachs Group Inc. didn’t pay 2016 bonuses to about 100 bankers who advise on takeovers and underwrite securities offerings, signaling to a bigger crowd of underperformers that they’re probably better off elsewhere, according to people with knowledge of the matter.
The move is more draconian than in past years when many dealmakers who failed to impress their bosses still got something, said the people, who asked not to be identified discussing the firm’s compensation practices. The number of employees denied a bonus in recent weeks is higher than a year ago — eliminating what’s typically a major component of their pay.
For bankers and traders at a well-capitalized and profitable firm, getting no bonus is a dreaded scarlet letter — usually a strong hint that they’re no longer wanted and should start hunting for another job. Around the industry, it’s known as getting “blanked,” or receiving a “goose egg,” a “bagel” or a “doughnut.”
It’s all part of a Wall Street compensation model that distills an individual’s performance into a single number at year-end. Many employees spend the intervening months trying to calculate how their business is faring, and how much they’re contributing, in anticipation of a bonus that can sustain an expensive lifestyle, build wealth or even pay for a house.