Goldman compensation - $1 mln per employee in sight

By Juan Lagorio

NEW YORK (Reuters) - Goldman Sachs Group employees, on average, are within striking distance of $1 million (614,000 pounds) of compensation and benefits this year, just months after the bank received bailout funds and other support from the government.

The figure will likely fuel criticism of the politically connected bank, especially at a time of recession and rising unemployment.

Goldman on Tuesday said money set aside for pay surged 75 percent in the second quarter. Compensation and benefit costs were $6.65 billion, up 47 percent from the comparable quarter in 2008.

Given a 16 percent reduction in staff from last year, to 29,400, the bank set aside an average $226,156 per employee in the quarter, up from $129,200 a year ago. If the quarterly figure is annualized, it comes to $904,624 per employee.

"It is definitely a politically charged issue, but one of the objectives of Goldman paying back the government was that it would be free to adjust compensation," said Marshall Front, chairman of Front Barnett Associates.

Front said Goldman could pay some "hefty bonuses" this year but not as big as before the financial crisis, when senior managers pocketed tens of millions of dollars.

Gustavo Dolfino, president of New York-based headhunter WhiteRock Group, estimated compensation packages could top around $10 million or $11 million, and will be just for a handle of traders that structured deals that made money.

"The biggest bonuses will go specifically to the foreign exchange and commodities traders, that are the people accountable for the kind of profits that Goldman is doing," Dolfino said. "People at investment banking will not make a lot of money, and people at middle market sales, and M&A will make a little bit more of money."