Goldman Sachs employees will be celebrating a slightly slimmer Christmas than they might have done had Wall Street rival Lehman Brothers stayed afloat.

A number of the elite bank's some 400 partners will see their total pay packets slashed to less than $1 million (£640,000) for 2008, a far cry from last year when they celebrated with between $5 million and $20 million each in estimated compensation.

Announcing its fourth-quarter and full-year results yesterday, Goldman said that it would pay out $10.9 billion in salaries, bonuses, benefits, taxes and other expenses this year — almost $500 million less than it had been ready to pay out at the end of August.

But do not expect too many tears on Wall Street for Goldman staff because workers at other banks are likely to fare even less well when they receive their 2008 pay.

Recruiters reported that some banks were considering cuts of up to 75 per cent on last year's compensation.

Richard Lipstein, the managing director at Boyden Global Executive Search, the New York recruitment agency, said: “[Goldman's] pay is better than competitors are likely to make in a market like this because Goldman managed its risk much better. But even they can't overcome what's happening in the overall environment.”

Although he declined to comment on individual remuneration, David Viniar, Goldman's chief financial officer, acknowledged yesterday that the bank's partners' pay would reflect the bank's performance. Goldman yesterday reported its first quarterly loss in 10 years.

“This year our performance is down quite considerably from last year so our compensation will be down quite considerably from last year,” Mr Viniar said.

He said that workers were likely to receive a greater proportion of their pay in equity to encourage an improvement in the bank's long-term performance. Goldman's shrunken compensation fund reflects just how difficult trading was in the final quarter of the financial year after Lehman's collapse on September 15 sent financial markets into a fresh spiral downward.

Goldman's 30,000 staff will end up taking home approximately $364,000 each on average in pay and benefits, about $16,000 less than they had been allocated three months previously and equivalent to 54 per cent of the compensation package they received last year.

The figures would have been even worse had Goldman not laid off 10 per cent of its staff, reducing the drain on the pot of cash.

Goldman Sachs was the first bank to announce last month that Lloyd Blankfein, its chief executive, and six other executives would give up their bonuses for 2008.

Last year, in which Goldman's profits hit record levels, Mr Blankfein was paid $68.5 million in cash and stock.

Mr Viniar received $57.5 million, while the bank's co-presidents Jon Winkelreid and Gary Cohn were paid $67.5 million.

With American taxpayers funding a $700 million bailout of banks, including a $10billion recapitalisation of Goldman, the issue of executive compensation is a sensitive one. Andrew Cuomo, the New York attorney general, has demanded information on bonus pool allocations from the nine largest US banks. All eyes will be on Morgan Stanley when it announces its fourth-quarter figures today, in order to see how much the bank cuts pay across the company.

John Mack, Morgan Stanley's chief executive, told staff last week that he and other senior executives would not take 2008 bonuses. Total compensation for the bank's top 49 employees is expected to be down by between 65 per cent and 75 per cent.

John Thain, the chairman and chief executive of Merrill Lynch, plus his top four executives, also gave up their 2008 bonuses after the bank was forced into a rescue merger with Bank of America.

Goldman's partners are traditionally among Wall Street and London's best-paid executives.

They receive a basic salary of $600,000 but in good times can expect as much as $5 million from the bonus pool for new partners, while more experienced partners can receive $10 million to $20 million in a single year.

— BNP Paribas may get rid of 700 jobs across its investment banking unit, citing rocky financial markets and its exposure to an alleged $50 billion (£32 billion) fraud by Bernard Madoff, the US financier.

The division, which employs 14,000 worldwide, suffered a €710 million loss over the first 11 months of 2008.

The possible cull of 5 per cent of jobs at the unit as part of a restructuring would be one of the biggest ever seen at the division.

At the weekend BNP predicted its loss from the alleged fraud could be €350 million.

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