It limited bonuses to twice the basic pay if shareholders approved. However, banks often had to bump up the fixed salaries to circumvent the cap.

Goldman’s move would help it change the way it compensates its “material risk takers”, a class of employees whose performance can have a big impact on the bank, the source said, requesting anonymity as the details are confidential.

“This approach gives us greater flexibility to manage fixed costs through the cycle and pay for performance,” a Goldman spokesperson said.