City trader sets record by netting £30m bonus

So did he just make a few directional bets on GS capital that paid off ?


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Times London
Robert Winnett

A FINANCIAL trader is set to earn one of the biggest bonuses in City history — worth at least £30m and equivalent to the average annual earnings of more than 1,100 people.
The eight-figure pay package has been awarded to Driss Ben-Brahim, a trader at the investment bank Goldman Sachs.

City sources say that Ben-Brahim, who lives in a large town house in Kensington, west London, personally generated hundreds of millions in profits for the bank in 2003 — an achievement that rivals the profits made by entire companies such as British Airways or WH Smith which employ thousands of people.

The bonus — the biggest disclosed to a City trader — is paid in cash, shares and share options in Goldman Sachs, which Ben-Brahim will not be able to sell for several years in order to keep him at the bank.

Because of the way his pay package has been structured, it is difficult to calculate its exact value. But remuneration experts estimate it is worth at least £30m and it could rise to £50m if share prices rise.

Goldman Sachs refused to comment on the award but top bankers typically insist on a bonus equivalent to about 10% of the profits they earn, sometimes more if they are highly valued employees.

A friend of Ben-Brahim said: “He has taken on some really big risks but has enjoyed great success in 2003. He is the person everyone is talking about and he has been the most profitable trader around for the past few years. He deserves some recognition for his work.”

Ben-Brahim, who was previously assistant head of investments at the European Bank for Reconstruction and Development, is one of a new generation of traders who spurn the 1980s wide-boy image of the City. He is head of “exotic derivatives” at Goldman Sachs — a role that involves developing sophisticated financial models to profit from small movements in futures and options.

It is thought the bulk of his money has been earned speculating on the fall of the dollar, the seesawing prices of Japanese bonds and betting on movements in inflation rates.

“Very few people really understand what guys like Driss do but they develop these complicated trading strategies which, when they come off, generate some unbelievable windfalls,” said a City insider.

Ben-Brahim’s bonus signals the return of the good times in 2003 for London and New York traders after financial markets recovered from several years of falling share prices.
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Can we assume that buried somewhere in those equations was the possibility of reducing GSCO to a hot dog stand?

:eek:

 

interesting read.

that dwarfs lawrence hillibrand's $23 million pay in 1991 as part of salomon brother's bond arbitrage unit.

 

In fact GS are involved in proprietary trading now more than ever before as trading income becomes a greater proportion of net income. It's becoming a hedge fund using S/Hs $$$.

But I can't conceivably believe that he made GS "hundreds of millions" (from which his £30M bonus was calculated) using pure arbitrage techniques. LOL

So my guess is that he made it on a few huge directional bets (on trends last year) that went right.