US bank Goldman Sachs has dramatically changed course on its pay policy, setting aside nothing for bonuses in the fourth quarter and instead making a $500m charitable contribution.
The move helped the Wall Street bank to report a net profit of $4.95 billion, or $8.20 a share, for the three-month period, beating analysts' forecasts.
The move also helped Goldman to answer critics who have lambasted the bank for setting aside so much for bonuses so soon after US taxpayers rescued the banking industry during the financial crisis. For 2009, the bank set aside 36% of net revenue for such payments, a record low.
The firm paid out $16.19 billion in pay in 2009. It recorded a negative compensation figure in the fourth quarter because of the contribution to Goldman Sachs Gives, the firm's charitable arm.
The compensation total was far below the record $20.2 billion the firm paid in 2007, and well below what the firm was expected to pay this year as it reported blockbuster profits.
In the 2008 fourth quarter the bank reported a loss of $2.12 billion, or $4.97 a share.
