Monday, December 11, 2023

Goldman Sachs cuts David Solomon’s salary over 1MDB scandal

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Goldman Sachs chief executive David Solomon earned $ 17.5 million for 2020, $ 10 million less than the year before, after the bank’s board slashed senior management salaries following 1MDB corruption scandal.

The bank said in a regulatory filing that if Mr. Solomon was “not involved or informed of the company’s involvement in illegal activity at the time.” . . the board considers the 1MDB file to be an institutional failure, incompatible with the high expectations it has for the company ”.

In 2012 and 2013, Goldman collection $ 600 million for organizing a $ 6.5 billion bond fundraiser for the Malaysian State Investment Fund, much of the proceeds of which was ultimately stolen. Two Goldman bankers, Tim Leissner and Roger Ng, were sued in connection with the scandal and the US bank agreed to pay the Malaysian government $ 3.9 billion to settle the case.

The board also noted that the bank generated its highest revenue for more than a decade in 2020, and called Mr. Solomon’s individual performance during the year “outstanding.”

Goldman Sachs investment banking and trading results were boosted by market volatility and falling interest rates during the year. It reported net profit of $ 9.5 billion, a 12% increase from 2019.

Goldman Sachs shares rose 14% in 2020, roughly in line with the larger market. Shares of its closest rival, Morgan Stanley, rose 34%.

Mr. Solomon’s reduced salary places him well behind his peers in the salary rankings. Morgan Stanley chief executive James Gorman and JPMorgan Chase’s Jamie Dimon earned $ 33 million and $ 31.5 million respectively for 2020.

Mr. Solomon’s package consists of $ 2 million in base compensation, $ 4.65 billion in cash bonus, and $ 10.85 billion in stock-based compensation that vest. over time and vary based on stock performance.

Goldman Sachs also announced the compensation of chief operating officer John Waldron, who earned $ 18.5 million for 2020, and chief financial officer Stephen Scherr, who earned $ 15.5 million. The bank said the two men’s pay would have been $ 7 million higher without the 1MDB scandal.


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