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Good deal: Average Goldman Sachs employee makes $622,000

After making record profits, Wall Street giant Goldman Sachs Group Inc. reported that it will pay its workers an average of $622,000 this year.

That's more than three times the average salary of a Massachusetts surgeon; four times that of a Massachusetts chief executive; and nearly 12 times that of a Massachusetts high school teacher, according to the state's Department of Workforce Development.

"Wow," said Aaron Green, founder and chief executive of Professional Staffing Group, a job placement firm in Boston. "I've got to get a job there."

The big pay day at Goldman Sachs is the product of a big year on Wall Street and an even bigger year for Goldman, which yesterday reported the highest annual profits ever for a securities firm. Buoyed by rising stock and commodity prices, and record corporate takeovers, Goldman's profit jumped 70 percent from a year earlier, to around $9.5 billion -- more than the top five Wall Street firms earned in both 2001 and 2002.

As a result, Goldman set aside about $16.5 billion for salary, bonuses, and benefits for its 26,000 employees. That averages to more than $600,000 a person.

"Jeez," said Nariman Behravesh, chief economist at Global Insight, a Waltham forecasting firm. "Not even our best-paid executives make that -- and we've had a good year."

Average annual salary for an economist in Massachusetts: About $70K.

Wall Street is benefiting from record corporate profits, which have left companies flush with cash, Behravesh said. That, in turn, has fueled a wave of mergers and acquisitions, from which Goldman and similar firms profit by putting together the financing.

Certainly, it's not a secret Wall Street can pay well. And not every Goldman employee will make $622,000, since the average is skewed by top traders and investment bankers who can make millions.

But even by Wall Street standards, Goldman employees are making a bundle. A Bloomberg News analysis estimated that Goldman's average pay per employee this year will nearly double that of the next highest paying, Lehman Brothers Holdings Inc.

"We work very hard here," said Peter Rose, a Goldman spokesman.

"The reason for our success comes from our people, and we want to reward them."

Rose said an employee's compensation is determined by the overall performance of the firm; the performance of the department an employee works for; and individual performance.

Still, these outsized earnings renewed concerns about the growing gap between rich and poor in the United States, and whether the benefits of the economic expansion are getting distributed equitably. The payday also renewed questions about the value society places on different kinds of work.

Anne Wass, president of the Massachusetts Teachers Association, noted the average pay of a Goldman employee would allow a Massachusetts school system to hire 11 more teachers, who makean average of $53,000.

Richard Gulla, a spokesman for the Massachusetts Medical Society, said it's the equivalent of four primary-care physicians, who make around $150,000 a year on average.

Meizhu Lui, executive director for United for a Fair Economy, a national nonprofit group based in Boston, added that the average Goldman salary is 58 times the annual earnings of minimum wage worker in the US.

"There's no way they're working 58 times as hard," she said.

Shaun Wynn, 42, of Quincy, is a service technician for Verizon, earning less than $70,000 a year. He called the Wall Street salaries "ludicrous."

"How much is enough for one person?" he said. "They're making these astronomical salaries, and the rest of us are trying to keep up with these exorbitant fees for health care. It all comes down to what's fair and equitable."

While the salaries on Wall Street can be outsized, they reflect risk that few other professions face, said S.P. Kothari, a professor at MIT's Sloan School of Management. Traders and investment bankers constantly have to meet the bottom line: One year they can make $600,000, the next year, lose their jobs.

Goldman Sachs, Kothari added, is the "creme de la creme" of Wall Street securities firms, attracting the top talent in the industry and paying for it. For example, of the 200 or so Sloan School graduates who apply to the firm each year, only about 10 get jobs, he said.

Of course, a business professor's salary, averaging $99,000 in Massachusetts, pales to those on Wall Street. But, said Kothari, "Coaches always make less than the players."

Robert Gavin can be reached at Material from Bloomberg News is included in this report.

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