Financial Services

Goldman grants stock worth $30m in five years to chief David Solomon

Bonus plan tied to share price targets for Wall Street investment bank

David Solomon, chief executive officer of Goldman Sachs Inc. Photograph: Hollie Adams/Bloomberg

Joshua Franklin
Fri Oct 22 2021 - 20:56

Goldman Sachs has granted a bonus plan for its top two executives that could pay the pair tens of millions of dollars each if the Wall Street bank hits stock price goals over the next five years.

In a regulatory filing on Friday, Goldman said it had granted performance-based stock worth $30 million (€25.77m) to chief executive David Solomon and $20m in stock for group president John Waldron. The awards would be paid out in October 2026.

Goldman said the awards were to “ensure leadership continuity”, align remuneration with “rigorous performance thresholds” and “enhance retention in response to the rapidly increasing war for talent”.

The pair’s stock bonuses are split evenly into two buckets. One is paid out based on stock price gains for Goldman in the next five years, and the other is based on how the bank’s stock performs compared with a set of six peers, among which are JPMorgan Chase, Morgan Stanley and Bank of America.

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The shares granted to Solomon and Waldron were valued at Goldman’s recent average stock price of $409.48. If the bank hits the performance targets for them to get the bonus, the shares would be worth considerably more.

Solomon has been chief executive of Goldman since October 2018. The bank’s stock has risen about 80 per cent under his tenure and recently hit an all-time high. However, it still trades at a lower valuation multiple than rivals such as JPMorgan and Morgan Stanley.

Solomon recently said in an interview with the Financial Times that the market would eventually re-rate Goldman’s stock if it delivered on a strategy to diversify from investment banking and trading.

Solomon earned $17.5 million for 2020, $10m less than the previous year, after the bank’s board cut the pay of senior executives in the wake of the 1Malaysia Development Berhad corruption scandal, in which Goldman admitted paying bribes to secure work raising money for the Malaysian sovereign wealth fund.

Morgan Stanley’s James Gorman was the top paid US bank chief executive for 2020, earning $33 million in total remuneration, ahead of the $31.5m awarded to JPMorgan’s Jamie Dimon.

Earlier this year, JPMorgan granted Dimon a “special award” of 1.5 million share options that are projected to be worth about $49 million after a 10-year vesting schedule. –Copyright The Financial Times Limited 2021

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