Scrooge Pays Visit to Goldman, Sachs & Co. : Wall Street: Firm says sharply lower profits, down 80% since 1993, will mean big cut in year-end bonuses.

Goldman, Sachs & Co., the most affluent firm on Wall Street, is doling out the lowest bonuses in recent memory to a majority of its employees this year, a sure sign of a grim Christmas on Wall Street.

In an internal memo circulated Monday, Goldman said it will pay year-end bonuses equal to 8% of salary for most of its 9,000 work force who aren’t partners and earn most of their pay from salary.

Goldman told employees in the memo the move was prompted by sharply lower profits this year. Wall Street sources estimate that Goldman’s profits are plunging 80% from 1993’s record $2.3 billion amid a bond market downturn akin to the 1987 crash in stocks.

In 1993, Goldman paid 30% bonuses. In the previous three years, Goldman paid year-end bonuses averaging 23%.

Goldman, Wall Street’s last major private partnership, does not publicly disclose its earnings.

Other investment banks are expected to follow the lead of Goldman. Its fiscal year ends Nov. 30, and it is among the first major Wall Street firms to calculate year-end bonuses.

Wall Street firms have suffered mightily this past year from the sharp rise in interest rates that began in February. Reeling from huge losses, Salomon Brothers Inc. announced a change in employee pay that would sharply cut compensation during times of weak earnings.

“There’s no reason for (Goldman’s) competitors to be paying substantially more,” said Edward S. Orchant, president of A-L Associates, a Wall Street recruiting firm. “Over the past month or so all of the major Wall Street players have ratcheted down bonus expectations.”

Rumors that compensation would be cut sharply this year have circulated for weeks at Goldman, which also is reducing its work force by 5% to cut costs. But the meagerness of the bonus was considered a surprise.

Unlike other industries where bonuses just about cover the cost of Christmas presents, Wall Streeters rely on huge year-end sweeteners for such big-ticket purchases as houses and cars.

The 8% bonus, payable on Dec. 16, was lower than in recent memory at Goldman. But in the early 1970s, bonuses in that range were typical, a source close to the firm said.