The New York Times 'DealBook' column reports that some feel that Goldman Sachs may respond to the outcry over bonuses and cut the size of its staff compensation pot in the second-half of this year, resulting in larger profits and bigger dividend payments to shareholders.

Goldman has come under fire for the fact that it has set aside $11.4bn for employee compensation in the first-half of 2009, and many feel that this is simply insensitive given the parlous state of the general economy. And one group of analysts feel that Goldman will be alive to this mood, and may decide it will be prudent not to rub lawmakers / taxpayers noses in it by paying out the maximum amount possible to staff this year-end. Analysts over at Pali Capital have raised Goldman's stock rating to a 'buy' from 'neutral', citing, among other factors, that the firm may elect to set aside up to 50% less cash for compensation as the year plays out.

One banker told Here Is The City: 'Goldman will clearly not firm up its employee bonus pot until it has a handle on its full-year earnings, and the second-half of the year for the industry as a whole is thought likely to be more challenging for profits than the January - June period. The firm is therefore likely to have less to distribute to staff in any case. Having said this, Goldman knows that it cannot operate in a vacuum. It may be prudent to exercise some bonus restraint this year. In the end, Goldman will do the right thing for its business, and this may mean reining in bonuses to some degree'.

And the political dimension to this year's bonus round will not just affect Goldman Sachs. Bonuses at Bank of America / Merrill Lynch, Citi, JPMorgan and Morgan Stanley will not just be determined by earnings and the ability to make payouts this year. Only a fool would discount the political realities come the end of the year.

Finally, The Financial Times reports that US regulators are said to have put direct pressure on Citi to replace CFO Ned Kelly, who stepped down in July, after just 4 months in the job. On hearing that his days were probably numbered, Kelly is said to have immediately tended his resignation.

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