Goldman guilty trader’s pitiful salary tells story of GFC

Matthew Taylor Goldman Sachs

Source: Bloomberg

Bloomberg is reporting former Goldman Sachs Group (NYSE: GS) trader Matthew Taylor pleaded guilty to concealing an unauthorised $US8.3 billion trading position in 2007, causing the bank to lose $US118 million.

Taylor, now aged 34, told the judge he took the position to boost his standing, and his bonus, at Goldman Sachs.

Get this…

Taylor’s salary in 2007 was $150,000 and he expected a $1.6 million bonus.

So Taylor broke the law by concealing his position. He’s staring at some serious jail time.

Rule number one for investment bankers is don’t break the law.

Rule number two is maximise your bonus, because your ‘pitiful’ base salary will never buy you a Ferrari.

Put it this way…

If that was the make-up of your salary package, wouldn’t you bet as much of the bank’s money as legally allowed  in order to earn the maximum possible bonus for yourself?

The worst thing that can happen to you is you lose your job.

The worst thing that can happen to a “too big to fail” bank is the taxpayer bails them out. Again.

Heads they win. Tails we lose.

And while remuneration packages like the above remain in place, you can be sure a new financial crisis will again emerge…it’s just a matter of time.

Should you buy or sell your Telstra shares? Get a top analyst’s latest Telstra recommendation in our brand-new investment report. Click here now, your copy is FREE!

The Motley Fool’s purpose is to help the world invest, better.  Click here now  for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Motley Fool General Manager Bruce Jackson has an interest in Telstra.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.