Goldman Sachs has decided to cap last year’s pay & bonus packages for its 100 most senior UK-based employees at £1 million.

However, a number of UK employees below partner level will still receive payments of over £1 million.

Goldman Sachs has already announced that that its 30-person management committee, including Vice-chairman Michael Sherwood, would get their 2009 bonuses in stock.

It should be noted here that previous week Goldman Sachs said that it would distribute £10 billion in compensation and benefits for 2009, up 48 per cent from 2008.

Previous week, US president Barack Obama stunned the banking industry by announcing that he would prevent retail banks from making high-risk trades and using money in investments.

In the UK, Chancellor Alistair Darling announced a one-off 50 per cent tax on bankers' bonuses to discourage banking bonus culture which encourages excessive risk-taking.

Goldman Sachs has a workforce of 5,500 people in the UK.