The investment bank, based in New York, said in a regulatory filing this week that bonuses will be linked to financial benchmarks that might include return on equity, earnings, or the price of Goldman's stock or other securities issued by the company.
The plan applies to unspecified "key employees" starting this year. It gives Goldman the ability to take back bonuses from employees who violate company rules.
Goldman says the plan aims to "align compensation with long-term performance in a manner that does not encourage imprudent risk-taking."
The financial overhaul law passed this summer allows regulators to block pay plans that encourage excessive risk. Such pay practices contributed to the financial crisis by pushing traders to make deals that yielded quick profits but later upended the market.
Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008. The bank was among those that created mortgage-backed investments that turned out to be toxic. Goldman later bet against some of those investments and made billions when the housing market collapsed.
Goldman took $10 billion from the taxpayer bailout that Congress authorized to unclog frozen credit markets. It then awarded 953 executives bonuses worth $1 million or more for their work in 2008.
A Goldman spokesman did not immediately respond to requests for comment during the Christmas holiday.