Goldman Sachs Q4 profits fall as compensation costs soar

Goldman Sachs’ said its fourth-quarter profits fell by 13% from a year earlier, largely due to the bank preparing to pay out hefty pay packages to its well-compensated employees

NEW YORK -- Goldman Sachs' said its fourth-quarter profits fell by 13% from a year earlier, largely due to the bank preparing to pay out hefty pay packages to its well-compensated employees.

It's the latest sign that wages are increasing sharply, particularly on Wall Street. Most of the major banks who have reported their results so far have indicated plans to pay employees more in the upcoming year.

The New York-based investment bank earned a profit of $3.94 billion, or $10.81 a share. That's down from $4.51 billion, or $12.08 a share, in the same period a year earlier. The results missed analysts' expectations, who were looking for on average a profit of $11.80 a share, according to FactSet.

While Goldman was able to grow revenues in the quarter, those gains were more than wiped out by the firm's compensation expenses. The bank set aside $3.25 billion to cover compensation and benefits in the quarter, up 31% from a year earlier.