Goldman Sachs is increasing bonuses. Here's who will probably get them

Like JPMorgan, Goldman Sachs reported its third quarter results today. As we reported earlier, people have been leaving Goldman because they allegedly don't think they'll be paid this year. They may turn out to be wrong.

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Goldman Sachs increased compensation spending 10% in the first nine months of this year, despite only increasing its headcount by 4%. The average of the firm's 48,300 employees is on track to earn $393k, up from $372k last year. The flex is likely to come in the performance-related bonus. Goldman said its increased spending on pay reflected its improved operating performance.

Who deserves its largesse? In the third quarter, Goldman's M&A bankers and debt capital markets bankers outperformed, increasing revenues by 60% and 30% year-on-year respectively. At Goldman Sachs and Citi, M&A revenues increased by less than 10%.

Away from M&A and DCM, Goldman said today that its third quarter revenues were also "significantly higher" in prime financing, fixed income currencies and commodities intermediation, equities financing, and rates trading.

However, the firm said its Q3 revenues were "significantly lower" in FX trading and in cash equities intermediation.

Across the firm as a whole, profits were up 37% year-on-year in the third quarter as revenues rose 20%. Goldman added 2,400 people net in the quarter, although it said this was largely due to the arrival of campus recruits.

Speaking on JPMorgan's investor call today, Jamie Dimon said it's necessary for banks to pay competitively because there's so much competition for staff, both from rival banks and from hedge funds. 

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