Yahoo Finance Goldman Sachs cuts pay of chief executive David Solomon by $10m
Goldman Sachs has cut the pay of its chief executive, David Solomon, by $10m (£7.3m) after the bank was forced to pay billions of dollars to settle an international investigation into its role in the 1MDB scandal.
Solomon was still granted a $15.5m bonus on top of his $2m annual salary, in light of the investment bank’s bumper performance last year. It left Solomon with a pay packet totalling $17.5m, compared with $27.5m in 2019.
Solomon’s pay is nearly half the size of the $31.5m package handed to JP Morgan’s chief, Jamie Dimon. Morgan Stanley’s boss, James Gorman, surpassed both rivals after receiving $33m.
A strong showing by Goldman’s investment division in 2020helped the bank beat expectations with a 12% rise in full-year profits to $9.5bn. The lender more than doubled its profits and reported record revenues in the fourth quarter.
Goldman announced in October that it was cutting executive pay by a combined $31m, after reaching a $2.9bn settlement with global regulators and the US Department of Justice over its alleged role in the 1MDB corruption scandal.
Months earlier, Goldman agreed to pay $3.9bn to the Malaysian government, after claims it allegedly failed to act while $4.5bn was looted from the country’s sovereign wealth fund. Goldman underwrote and arranged bond sales for the fund and earned $600m in fees for helping raise the cash, according to the DoJ.
In regulatory filings released overnight, Goldman Sachs explained that none of the current executives, including Solomon, were involved or aware of the bank’s participation “in any illicit activity” regarding the arranging of bond sales for 1MDB. However, the bank’s board said it “views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm.”
Goldman’s president and chief operating officer, John Waldron, and its chief financial officer, Stephen Scherr, each had their pay reduced by $7m, leaving them with pay packets worth $18.5m and $15.5m respectively.
In total, the Wall Street bank is trying to claw back a total of $174m from a dozen current and former executives.
