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Goldman Sachs has raised CEO David Solomon’s pay by more than a quarter and created an $80 million retention plan for him and President John Waldron, bringing them both to the top of the bank. I made sure to stay there.
The Wall Street bank reported its best year since the 2008 financial crisis earlier this week and announced a 26% increase in Mr. Solomon’s 2024 salary to $39 million, according to a regulatory filing. .
Mr. Solomon has fought back against internal unrest over the past few years after Goldman’s failed foray into consumer banking, but the board and most investors have expressed confidence in Mr. Solomon’s leadership and in the search for alternatives. We firmly supported his decision to increase the importance of asset and wealth management, including:
Meanwhile, Mr. Waldron briefly spoke with private capital firm Apollo about his role at the top and has been approached by other groups, which solidified Mr. Goldman’s determination to continue in the role, three people familiar with the matter said. people told the Financial Times.
“The company is experiencing strong operating results, and the board is determined to maintain momentum, ensure stability and maintain a solid succession plan,” Goldman said.
The size of Mr. Solomon and Mr. Waldron’s compensation dwarfs even the $50 million five-year sum JPMorgan Chase gave Jamie Dimon in 2021. Morgan Stanley last year placed a $20 million pot on new CEO Ted Pick and the two people he competed for. top job.
Goldman also for the first time paid bonuses to Mr. Solomon, Mr. Waldron and other executives based on the performance of their alternative asset funds, in addition to stock and cash. This is a sign that the bank is starting to pay its senior executives in the same way as large private equity firms.
The equity portion of the annual salary package is vested based on Goldman’s stock price and the achievement of return on equity targets, but the portion is tied to the bank’s funds based on performance, a type known as “carry.” There is also a salary.
Most banks and traditional asset managers use carry to compensate fund managers, but including it in executive pay is highly unusual. Goldman said its chief financial officer Dennis Coleman and top lawyer Kathryn Ruemmler would also receive similar compensation.
“At a time when competition for talent at Goldman Sachs is particularly intense, including from asset managers and other non-banks, we are evolving compensation to strengthen the firm’s ability to continue to attract and retain top talent,” the bank said in a statement. “
Goldman has lost partners and executives in recent years to asset managers, private capital and trading firms, including TPG, Citadel, Sixth Street and General Atlantic.
A Wall Street executive close to Goldman predicted the big package for Waldron “will be enthusiastically welcomed within the company and by our partners.” He is well-liked and respected throughout the industry. ”
Additional reporting by Stephen Gandel and James Fontanella-Khan
