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Goldman's Bonuses Will Be Decided By Mid-December

The formula to determine Goldman Sachs' executive bonuses will be decided by mid-December, people familiar with the matter told CNBC, and will set a precedent for other investment companies to follow.

The awaited formula is crucial because if Goldman increases its bonuses, other investment firms will have to ramp up their bonuses in order to compete to retain their top talent during a time when the firms are already under financial pressure.

Lloyd Blankfein, Goldman’s chairman and CEO, is expected to earn between $10 million and $30 million, according to sources, a far cry from the nearly $70 million Blankfein received in 2007.

No matter what the size of Blankfein's bonus, it is likely to be paid in all stock, sources said. Goldman is planning on paying its top 15 executives bonuses that are 100 percent stock, with other employees receiving a mix of 75 percent stock and 25 percent cash.

Blankfein received a salary of $1.1 million last year, but did not receive a bonus.