Goldman Sachs Group Inc.
GS -0.45%
reduced by 36% the pay of chief executive David Solomon by 36%, a punishment for the bank’s admission last year that it violated U.S. laws in its dealings with a investment in the heart of a ring of global corruption.
Solomon received a $ 17.5 million compensation package for 2020, below the $ 27.5 million it earned for 2019, according to a securities statement on Tuesday.
In October, Goldman agreed to pay nearly $ 3 billion to government officials in four countries to end an investigation into the work it did for 1MDB, a Malaysian fund that prosecutors had alleged was made. serve to pay bribes to politicians in Malaysia and the Middle East. The bank then said it would take a total of $ 174 million in compensation from current and former executives.
Mr Solomon’s 2020 pay would have been in excess of $ 10 million, but for the actions his board took in response to the 1MDB saga, Goldman said in the presentation. Its compensation package consisted of a base salary of $ 2 million, a cash bonus of $ 4.65 million and a stock premium of $ 10.85 million, which is related to the bank’s good performance over the next few years.
Costs and fines related to the aftermath of the 1MDB scandal caused a bite of what was a standard year for Goldman companies, which gained a big boost from the rebound of markets from the depths of the recession of the coronavirus. Goldman’s annual revenue of $ 44.56 million was Goldman’s highest since 2009.
Other heads of banks that witnessed strong growth last year were rewarded with big rises. Morgan Stanley paid CEO James Gorman $ 33 million for his work in 2020, up 22%.
John Waldron, Goldman’s president and chief operating officer, and Stephen Scherr, Goldman’s chief financial officer, saw their salaries cut by 2020 by 24% and 31%, respectively. Each would have earned $ 7 million more, but for 1 MBD.
The top three executives were not “involved or aware of the company’s involvement in any illegal activity,” Goldman said in the filing. However, his salary was reduced because the bank’s board saw the 1MDB scandal as “an institutional failure, incompatible with the high expectations it has for the company”.
Goldman helped raise $ 6.5 billion for 1MDB by selling bonds to investors. Prosecutors alleged that Goldman senior executives ignored fraud warning signs in their dealings with 1MDB and Jho Low, the fund’s adviser. Two Goldman bankers have been criminally charged with the scandal.
Still, Goldman’s relationship with 1 MBD cost the bank more than $ 5 billion.
Write to Peter Rudegeair to [email protected]
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It appeared on January 27, 2021, in the print edition, as “Goldman Sachs Reduces CEO Solomon’s Remuneration by 36%.”