NEW YORK (Bloomberg) — Goldman Sachs Group Inc., the firm that set a record for Wall Street pay last year, became the first US bank to scrap 2008 bonuses for senior officers in the face of the worst financial crisis since the Great Depression.

Chief executive officer Lloyd Blankfein, 54, and six deputies told the New York-based bank's compensation committee yesterday that they would forgo the year-end awards, according to Goldman spokesman Lucas van Praag. Each of the executives receives a salary of $600,000; Blankfein's bonus last year was almost $70 million.

"They believe it's the right thing to do," van Praag said in a telephone interview. "We can't ignore the fact that we are part of an industry that's directly associated with the ongoing economic distress."

Wall Street bonuses, typically about two-thirds of the firms' total annual compensation, are under scrutiny by lawmakers and taxpayers after the US government passed a $700 billion rescue plan for the industry. Banks and brokerages have announced $707 billion of write-downs and credit losses since the sub-prime-mortgage market collapsed last year, and have cut almost 160,000 jobs. Lehman Brothers Holdings Inc., once the biggest underwriter of mortgage securities, was forced to file for bankruptcy.

New York Attorney General Andrew Cuomo, who demanded pay information last month from banks that received bailout funds, lauded Goldman for taking a "step in the right direction."

"This gesture by Goldman Sachs is appropriate and prudent and hopefully will help bring Wall Street to its senses," Cuomo said in a prepared statement. "We strongly encourage other banks to follow."

Citigroup Inc., which yesterday said it plans to cut 50,000 jobs, should follow Goldman's lead, Cuomo said yesterday.

"It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers and now Citigroup's own employees suffer," he said. He added that companies like American International Group Inc., which have also relied on taxpayer support, should consider bonus cuts.

At Goldman, Blankfein, chief financial officer David Viniar, co-presidents Jon Winkelried and Gary Cohn, and vice-chairmen Michael Evans, Michael Sherwood and John Weinberg won't receive year-end payouts, van Praag said. In the nine months through August, Goldman's compensation expense dropped 32 percent from last year to $11.4 billion.

Revenue also declined 32 percent in the same period, profits fell 47 percent and some analysts predict the firm will report a fourth-quarter loss.