Goldman Sachs Group Inc. won’t delay distribution of U.K. bonuses to help minimize employees’ tax rates, a person with direct knowledge of the decision said.
The firm had considered postponing incentive compensation due to employees from 2009, 2010 and 2011 until after top income-tax rates drop in April. Bank of England Governor Mervyn King said today it’s “depressing” that banks may be willing to shift bonus payments to minimize workers’ tax burden.
U.K. Treasury minister Sajid Javid spoke with Goldman Sachs representatives today, according to a person with knowledge of the discussion. They gave assurances that bonuses would be paid in the normal way and that there would be no changes to the schedule. The call was set up yesterday, said the person, who requested anonymity because the discussion was private.
Goldman Sachs accelerated delivery of $65 million in stock awards last month to 10 executives, including Chief Executive Officer Lloyd C. Blankfein, in a move that helped them avoid higher U.S. taxes that take effect this year. That change, which didn’t affect compensation for 2012, was made public in company filings at about 8 p.m. New York time on Dec. 31.
This week, the Financial Times and other media reported that New York-based Goldman Sachs, the fifth-biggest U.S. bank by assets, was reviewing whether to delay U.K. bonus payments due from prior years to help employees pay lower rates. The reports were met with criticism from U.K. politicians and King.
Management opted against proceeding with the plan, a decision that was ratified today in a regular meeting of the board’s compensation committee, said the person with knowledge of the decision.
British Broadcasting Corp. editor Robert Peston reported Goldman Sachs’s decision earlier today on Twitter.com.