Earnings fall – but bank to pay out £7.95bn

While the total pay packet – based on its headcount of 33,300, and equating to an average of $366,966 (£238,832) for each of its staff – had fallen 21 per cent compared with last year, the share of revenues paid out in salary and benefits for 2011 was up from 39.3 per cent to 42.4 per cent.

The firm, which employs around 5,300 staff in the UK who are all eligible for performance-related bonuses, posted a 47 per cent drop in net earnings to $4.4bn (£2.8bn) for the year to December 31. This followed a 26 per cent decline in revenues to $28.8bn (£18.7bn).

The figures are the latest in the annual results season for major US banks and will be watched closely on these shores as UK banks prepare to release their own figures next month.

On Tuesday, Bank of England governor Sir Mervyn King made a fresh appeal for fairness in bankers’ pay and bonuses.

Addressing the Treasury Select Committee, Sir Mervyn said banks would suffer damage to their reputations if big rewards were paid out at a time when their performance had “hardly been stellar”.

And he added the issue of bankers’ pay was of “profound importance” because taxpayers feel their money is being used to subsidise high pay when they themselves may be struggling.

Goldman Sachs took $10bn (£6.2bn) from the US Treasury at the height of the financial crisis but has since paid the money back, with taxpayers earning $1.4bn (£865m).

Last week, America’s biggest bank, JP Morgan Chase, revealed a $29bn (£18.9bn) bill for staff pay and bonuses in 2011, which equates to $111,471 (£72,700) for its 260,157 staff.

More business news: Business Thursday.