Lloyd Blankfein

The Financial Times reports today that US investment bank Goldman Sachs on Wednesday began celebrating confirmation of bumper bonuses for this year, with the Chairman and Chief Executive, Lloyd Blankfein, expected to lead the pack with a 30% increase in his pay to about $70 million.

Blankfein's bonanza is a record for annual earnings paid toa a "hired hand" as distinct from an entrepreneur. Many hired hands like to view themselves as entrepreneurs but there is a huge difference.

Blankfein's 3-year earnings will amount to $162 million.

The FT says that figures for Goldman came as Lehman Brothers said it would award Dick Fuld, Chief Executive, $41 million worth of restricted stock as part of his 2007 compensation. In total, Fuld stands to earn more than $50 million for last year when cash bonus and other payments are disclosed next year.

Goldman Sachs made money from subprime on the way up and as the alarm bells began to ring, it began hedging and it was in the money again as the outturn was much worse than it had expected.

(SEE Finfacts Report: How Goldman Sachs made money from US subprime mortgages on the way up and down)

Goldman Sachs' shares are up 9% this year.

Last year Goldman Sachs, which reported the best quarterly results in Wall Street history, paid its new chairman and chief executive, Lloyd Blankfein, about $54 million for 2006, a record for Wall Street bosses.

Blankfein, who became CEO in mid-2006 when Henry "Hank" Paulson was appointed US Treasury Secretary, saw his pay soar 42% from $38 million for 2005, when he was president and chief operating officer

Rival John Mack of Morgan Stanley, received a bonus of about $41 million for 2006, his first full year as chairman and CEO. He had scooped $13 million for five months' work in 2005, on top of a $26 million signing bonus for rejoining in June 2005 following the ouster of Phil Purcell.

The explosion in Wall Street pay to a baseline range of between $30 million and $40 million, came in the fourth year of a stock market bull run and the huge growth in private-equity buyouts and hedge-fund trading.

According to The New York Times, in 2006 Goldman paid its then 26,467 employees $16.5 billion in compensation in 2006, an average of $622,000 per employee. Lehman Brothers paid $8.67 billion, or $334,000 per employee, and Bear Stearns, $320,000. Employees at Morgan Stanley earned $264,715 per person.

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