Goldman Sachs’ David Solomon newest CEO hit with pay minimize
The Goldman Sachs Group minimize CEO and chair David Solomon’s salary by $10 million in 2022, after Apple CEO Tim Cook steered his personal pay discount earlier within the month.
The funding financial institution’s board diminished Solomon’s wage to $25 million in 2022 from $35 million in 2021 based mostly on Goldman Sachs’ efficiency evaluation framework in comparison with the agency’s efficiency in 2021.
Goldman’s 2022 internet income fell 20% to $47.37 billion whereas internet earnings dropped 49% to $10.76 billion.
Funding banking income plunged 48% to $7.36 billion.
Since taking the helm in 2018, Solomon has tried to diversify Goldman past its conventional powerhouses of buying and selling — which languished after the 2008 monetary disaster — and funding banking. However these divisions have turn out to be much more dominant, comprising 69% of the agency’s income on the finish of final yr, versus 58% the yr Solomon took over.
The CEO additionally championed Marcus, a retail banking enterprise that faltered even because it attracted greater than $100 billion in deposits.
Goldman’s strikes into client lending and transaction banking have been “head scratchers,” stated Kush Goel, senior analysis analyst at asset supervisor Neuberger Berman, which owns the financial institution’s inventory. As an alternative, it ought to have adopted rival Morgan Stanley, which earns a gentle stream of earnings from wealth-management charges, he stated.
Goldman’s asset and wealth administration unit generated 34% of its income within the fourth quarter, whereas Morgan Stanley derived 63% of its income from comparable divisions.
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Of the $25 million earned in 2022, Solomon’s $2 million annual base wage was unchanged year-over-year. His variable compensation got here to $23 million, comprising 70% in performance-based restricted inventory models that tie on to his equity-based compensation and ongoing efficiency metrics. The rest to be paid in money, in keeping with the SEC submitting.
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In a Securities and Change Fee submitting earlier this month, Apple announced CEO Tim Cook dinner would take a big pay minimize in 2023.
The submitting acknowledged Cook dinner steered his complete compensation for 2023 could be $49 million this yr after balanced shareholder suggestions, a 40% lower from what he raked in throughout 2022.
Cook dinner’s 2022 wage included $3 million in base wage and roughly $83 million in inventory awards and bonuses.
Reuters contributed to this report.