Today is a febrile day at Goldman Sachs: new managing director (MD) promotions are being announced. Uncertainty is in the air, but not just concerning the promotions.
Goldman Sachs MDs in London tell us they are still in the dark about the future of the personal allowances they were awarded to mitigate the EU bonus cap. Nor have they heard about the “limited” round of job cuts that Goldman is said to be making in the fourth quarter.
Three Goldman MDs in London told us they receive allowances and are expecting them to be cut, but that they’ve heard nothing on the topic.
Allowances are discretionary and paid in cash, unlike bonuses which are paid in deferred stock. MDs at Goldman and elsewhere like receiving allowances because they have no strings attached. “You’ve ruined my day,” said one, when we reminded him they’re likely to disappear.
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Allowances were a means for Goldman to sidestep the bonus cap, which restricted bonuses to 2x salaries. Goldman MDs say that people at the firm whose compensation exceeds a threshold “in seven figures” receive the allowances as a way of bumping up their pay without Goldman committing to a fixed salary. The allowances have varied each year and seem a bit like a cash bonus in all but name.
In May 2024, though, Goldman ditched the bonus cap for London staff and said it would be paying bonuses that are up to 25x salaries. In August 2025, Goldman insiders said they’d been told allowances would be halved. Since then, there’s been nothing.
With bonuses approaching, time is running out to make the changes. “I think we’ll just find out on compensation day,” says one MD. Another says the bank is unlikely to ever pay bonuses that are 25x salaries (“That’s bollocks”) but that bonuses will almost certainly rise and allowances must therefore fall.
At the same time, decisions regarding the coming round of job cuts appear to be happening in the dark. MDs in London say they’ve heard nothing of them.
Golmdan Sachs declined to comment.
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