Is Goldman Sachs turning stingy? In the three months just ended, the investment bank’s underlying ratio of compensation and benefits to net revenues has fallen to just 45.2 per cent. That is well below last year’s levels. It was also a big factor behind the surprisingly moderate fall in its profits compared with last year.

Given its habitually opaque reports, the fact Goldman for once beat expectations by means even mere mortals might understand is certainly welcome. Still, hoping to pay the rainmakers less sounds like an odd justification for Tuesday’s 5 per cent rise in Goldman’s share price.

To be sure, the bank has also weathered this year’s summer lull, after a vintage first half, better than expected. The fall in the compensation ratio itself reflects reassuringly strong revenues in almost all its business lines. That suggests market share gains in such areas as asset management and probably should not be extrapolated when it comes to rivals’ results.

More encouraging, however, is the fact that Goldman also seems to feel rather optimistic about its ability to hold on to a larger share of this year’s windfall. At a time when much of the industry is still hiring aggressively, keeping a lid on looming bonus payments might well prove challenging.

As with rivals, the main risk for Goldman remains that its employees will insist on what they believe to be their fair share, just as its underlying businesses finally start slowing. Preparing for that rainy day by managing expectations downwards is certainly wise. Unfortunately, it remains an open question whether even mighty Goldman with its stellar brand name as an employer will be able to pull it off.

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