Goldman Sachs increases CEO David Solomon’s pay by 24% despite weaker profits

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Goldman Sachs paid CEO David Solomon $31 million for 2023, up 24% annually even as the Wall Street investment bank reported its lowest profits in four years.

Last year was the busiest yet in Solomon’s five-year tenure at Goldman’s helm. He has faced a series of articles critical of his leadership style, while the bank has also cut thousands of jobs and suffered from a slowdown in investment banking.

But the board rewarded Solomon for reducing the loss-making push in retail banking, reaffirming Goldman’s strategy around its core investment banking and trading businesses and expanding into wealth and wealth management.

Solomon’s $31 million pay is made up of $2 million in base salary and a $29 million bonus, most of which is paid in stock based on performance, according to a securities filing on Friday. His compensation increased from $25 million in 2022, making 2023 his second highest-earning year leading Goldman, behind the $35 million he earned in 2021.

Solomon’s pay rose more than overall compensation and benefits expenses at Goldman, which increased just 2% last year. Goldman’s headcount fell by 3,200 employees in 2023 to just over 45,000, and average compensation expenses per employee increased nearly 10%

Rivals JPMorgan Chase and Morgan Stanley also raised their CEOs’ pay for 2023. JPMorgan’s Jamie Dimon, whose bank reported record profits for 2023, saw his salary rise about 4% to $36 million dollars, while Morgan Stanley’s James Gorman, who stepped down as CEO The CEO in early 2024 was paid $37 million, up 17.5%. Bank of America cut its top executive Brian Moynihan’s pay by 3 percent, or $1 million, to $29 million.

Goldman dealt several one-off hits to profits last year — such as scaling back its once-vaunted consumer business — in what analysts called a “kitchen sink” approach to clearing the decks for 2024.

“Although these strategic actions had a negative impact on near-term performance, the compensation committee believes that senior management’s actions were critical to refocusing the company with a much stronger platform for 2024 and beyond,” he wrote Goldman in the statement announcing Solomon’s pay.

The bank’s net income fell 24% in 2023 to $8.5 billion, the lowest since 2019. Goldman also reported a return on equity, a key indicator of profitability, of 7.5%, well below the bank’s target of 14-16 percent. hundred.

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