Goldman Sachs Group Inc (NYSE:GS)., the leading US bank with a market cap of 108.74B USD, announced an increase in its staff revenue payout ratio to 34.5% for the third quarter of 2023, Tuesday. This change represents an additional $690 million over the rate from last year. The decision is a reversal from the bank's previous stance of passing on revenue losses to its employees, which was implemented following significant compensation downturns due to consumer unit losses.
CEO David Solomon discussed these losses in a CNBC interview, noting that his own pay package had also been affected. After reaching a peak of $35 million in 2021, Solomon's compensation dropped roughly 30% to $25 million in 2022, coinciding with a decline in Goldman’s shares and profits. It's worth noting that Goldman Sachs' P/E ratio stands at 13.14, according to InvestingPro data.
The bank's compensation and benefits for Q3 surged by 16% from the previous quarter and the same period last year, totaling $4.2 billion. These expenses form part of the $11.9 billion outlay for the first nine months of the year. This increase in compensation is in line with the InvestingPro Tip that Goldman Sachs has been aggressively buying back shares, demonstrating a commitment to enhancing shareholder value.
The announcement comes amidst some churn within Goldman Sachs' executive ranks. Over the summer, five partners left the firm, including Lisa Opoku who led the bank’s family office. Solomon regards this turnover as routine. Despite this, Goldman Sachs remains a prominent player in the Capital Markets industry, as highlighted by InvestingPro Tips.
Goldman Sachs has a history of maintaining dividend payments, having done so for 25 consecutive years. Its dividend yield as of 2023 stands at 3.5%, according to InvestingPro data. The bank's commitment to dividends is underscored by the fact that it has raised its dividend for 11 consecutive years, another insight provided by InvestingPro Tips.
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