The Goldman Sachs Group Inc. reduced Chief Executive David Solomon’s 2020 salary by 36%, punishing the bank’s admission last year that it broke US laws with an investment fund at the heart of the global corruption ring.
Mr. Solomon received a compensation package of $ 17.5 million for 2020, which was less than $ 27.5 million for 2019, according to the securities filing on Tuesday.
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In October, Goldman agreed to pay nearly $ 3 billion to government officials from four countries, ending an investigation into work done for 1MDB, a Malaysian fund that prosecutors alleged was used by Malaysia And to bribe leaders in the Middle East. The bank said at the time that it would take a total of $ 174 million in compensation from current and former officials.
Goldman said in the filing that Mr. Solomon’s 2020 salary would be $ 10 million more, but its board of directors acted in response to the 1MDB saga. His compensation package included a $ 2 million base salary, a $ 4.65 million cash bonus, and a $ 10.85 million stock award to reflect how well the bank performs over the next few years.
Costs and fines related to the results of the 1MDB scandal took away a banner year for Goldman’s businesses, which was given a major boost by the market boom from the depths of the Coronovaire recession. Goldman had the highest annual revenue of $ 44.56 billion since 2009.
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Other bank heads presiding over strong growth last year were rewarded with large sums of money. Morgan Stanley paid CEO James Gorman $ 22 million for his work in 2020, an increase of 22%.
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Goldman’s president and chief operating officer John Waldron and Goldman’s finance chief Stephen Scheer cut their 2020 salaries by 24% and 31% respectively. Each would have earned $ 7 million more but for 1MDB.
Goldman said in the filing, “the three top executives” were not aware of the firm’s involvement in any unlawful activity. However, his salary was reduced as the bank’s board viewed the 1MDB scandal as “an institutional failure, inconsistent with high expectations for the firm.”
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Goldman helped 1MDB raise $ 6.5 billion by selling bonds to investors. Prosecutors alleged that senior Goldman officials ignored fraudulent warning signs of fraud in their dealings with 1MDB and the fund’s advisor Joho Low. Two Goldman bankers have been criminally charged in the scam.
All told, Goldman’s dealings with 1MDB cost the bank more than $ 5 billion.