Goldman Sachs Group Inc (NYSE:GS, ETR:GOS) is set to revamp compensation for its top London-based employees by removing bonus caps, aligning with practices in other major global financial centres.
This shift, first reported by Sky News, follows the UK's decision to discard EU-imposed limits on bonuses, a move designed to enhance the competitiveness of the British financial sector.
Previously, bonuses were restricted to twice the fixed salary, a regulation introduced post-2008 financial crisis to mitigate excessive risk-taking. The new framework will potentially allow bonuses up to 25 times the fixed salary.
Goldman's spokesman highlighted that this change will facilitate better cost management and performance-based pay, reinforcing the UK's appeal as a prime location for financial talent.
This policy update comes after the UK's departure from EU financial regulations, with other major banks expected to adopt similar changes.