Goldman Sachs' M&A bankers had an unfortunate end to 2024
If you're an investment banker and you want to get paid, it can help to insure your achievements are top of mind in the fourth quarter, when bonuses are being considered.
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From this point of view, the 4% year-on-year decline in Goldman Sachs' M&A revenues in the fourth quarter of 2024 doesn't look auspicious, particularly given that JPMorgan's M&A bankers achieved a 41% increase over the same period.
It might be a question of timing. Goldman said today that its investment banking fees backlog increased in the fourth quarter compared to the third, implying that deals that didn't happen in Q4 2024 will happen in 2025 instead. This should at least mean that Goldman's M&A bankers don't lose their jobs, but it may not help when it comes to their pay.
Goldman also said today that headcount across bank increased by 100 people in the final quarter, to 46,500 and that Q4 profits rose by 110% year-on-year. This was not entirely reflected in compensation spending, which increased by a mere 4% in the final quarter.
Similarly, Goldman's profits rose 68% year-on-year for 2024. However, the firm only increased compensation spending by 8%. Headcount rose 3%, with the result that average pay per head went from $342k to a marginally higher £359k over the full year period.
While Goldman's M&A bankers had a challenged final quarter, its equity capital markets bankers and traders did much better. For 2024 as a whole, though, only Goldman's equities traders outperformed JPMorgan's in revenue terms.
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