Goldman CEO Solomon's Pay Cut 36% Due to 1MDB Scandal

Goldman's board cut the CEO's pay, viewing 'the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm.'
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Goldman Sachs  (GS) - Get Report said Wednesday that Chief Executive David Solomon's total compensation was cut 36% to $17.5 million last year from $27.5 million in 2019, due to the 1MDB scandal.

Chief Operating Officer John Waldron and Chief Financial Officer Stephen Scherr also saw compensation reductions. Waldron’s total dropped to $18.5 million from $24.5 million, and Scherr’s to $15.5 million from $22.5 million.

“These compensation amounts reflect … the findings of the government and regulatory investigations and the magnitude of the firm’s settlement of government and regulatory matters relating to 1Malaysia Development Berhad (1MDB),” Goldman said in a Securities and Exchange Commission filing.

“While none of Messrs. Solomon, Waldron or Scherr was involved in or aware of the firm’s participation in any illicit activity at the time the firm arranged the 1MDB bond transactions, the board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm.”

To be sure, the assessment wasn’t all bad for the executives. 

The executives’ compensation also takes into account “the firm’s strong performance in successfully navigating an unexpected and volatile operating backdrop to meet the needs of clients – driving the firm’s highest full-year net revenues in more than a decade … as well as Messrs. Solomon’s, Waldron’s and Scherr’s outstanding individual performance,” the firm said.

Goldman shares recently traded at $276.10, down 2%. They have jumped 40% over the three months through Tuesday as the bank improved its financial performance.

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