Big profits for Goldman, JPMorgan

Those numbers aren't translating into higher pay for employees, however.

By Jonathan Berr Jan 16, 2013 12:07PM
Bank sign -- John Foxx, Stockbyte, Getty ImagesGoldman Sachs (GS) and JPMorgan (JPM), two of the most venerable banks on Wall Street, reported better-than-expected quarterly profits Wednesday. The people who work at these companies, however, may not feel like celebrating as executives continue to hold the line on compensation.

Goldman Sachs earned $2.89 billion, or $5.60 per share, in the fourth quarter, up from $978 million, or $1.84 per share, a year earlier. Revenue rose to $9.24 billion, well ahead of analysts' expectations of profit of $3.78 on revenue of $7.91 billion. 

The picture was also bright at JPMorgan, which reported a profit of $5.7 billion, or $1.39 per share, versus $3.7 billion, or 90 cents, a year earlier. Revenue jumped 10% to $24.42 billion. JPMorgan was expected to earn a profit of $1.16 per share on revenue of $24.42.

As Bloomberg News noted, one reason for Goldman's strong earnings was CEO Lloyd Blankfein's efforts, which began in 2011, to slash $1.9 billion in expenses. He has trimmed Goldman's payroll by 3%. Compensation amounted to 38% of Goldman's revenue in 2012, down from 42% a year earlier. On a per-employee basis. Goldman's compensation was $399,504 as of Dec. 31, up from $367,057 in 2011.
 
JPMorgan CEO Jamie Dimon, who is maniacal about cutting costs, has even been forced to tighten his own belt. The board slashed his 2012 compensation by 50% in the wake of the $6.2 billion "London Whale" trading loss. No one should shed a tear for Dimon since he still will earn $11.5 million.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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