Goldman Sachs Group Inc.
GS -0.45%
CEO David Solomon’s 2020 pay fell by 36%, a penalty for the bank’s admission last year that it violated U.S. laws when dealing with investment funds at the heart of a global corruption ring.
Mr Solomon received a $ 17.5 million compensation package for 2020, down from the $ 27.5 million he received for 2019, according to a securities filing Tuesday.
In October, Goldman agreed to pay nearly $ 3 billion to government officials in four countries to complete an investigation into work it carried out for 1MDB, a Malaysian fund that prosecutors said used to pay bribes to politicians in Malaysia and the Middle East. The bank said at the time that it would withdraw a total of $ 174 million in compensation from mainstream and former operators.
Mr Solomon ‘s 2020 pay would have been $ 10 million higher but for the actions taken by his board of directors in response to the 1MDB saga, Goldman said in the filter. His compensation package included a $ 2 million base salary, a $ 4.65 million cash bonus and a $ 10.85 million stock reward linked to how well the bank is performing over the next few years.
Costs and fines associated with falling out of the 1MDB scandal seized a year that was a flagship for Goldman businesses, which received a major boost from market shocks from the depths of the coronavirus recession. Goldman ‘s highest annual revenue was $ 44.56 billion since 2009.
Other bank bosses who led strong growth last year received a major award. Morgan Stanley paid $ 33 million to CEO James Gorman for his work in 2020, an increase of 22%.
John Waldron, Goldman’s president and chief operating officer, and Stephen Scherr, Goldman’s chief financial officer, saw their 2020 pay cut 24% and 31%, respectively. Each one would have earned an additional $ 7 million for just 1MDB.
The three chief executives were “not involved in or aware of the company’s involvement in any illegal activity,” Goldman said in the file. However, their pay was reduced because the bank’s board saw the 1MDB scandal as “an institutional failure, inconsistent with its high expectations of the company.”
Goldman helped raise $ 6.5 billion for 1MDB by selling bonds to investors. Prosecutors alleged that Goldman executives noticed warning signs of fraud in their dealings with 1MDB and Jho Low, an adviser to the fund. Two Goldman bankers were charged with criminal charges in the scandal.
All said, Goldman’s deal with 1MDB cost the bank more than $ 5 billion.
Write to Peter Rudegeair at [email protected]
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Appearing in the January 27, 2021, print edition as ‘Goldman Sachs Cuts Pay Of CEO Solomon with 36%. ‘