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Goldman Sachs has increased CEO David Solomon’s salary by more than a quarter and set out $80 million retention plans for him and Chairman John Waldron in an effort to ensure both remain at the top of the bank.
The Wall Street bank, which earlier this week reported one of its best years since the 2008 financial crisis, said it would raise Solomon’s 2024 salary by 26 percent to $39 million, according to regulatory filings.
Solomon has struggled with internal unrest in recent years after Goldman’s failed foray into consumer banking, but the board and most investors solidly backed his leadership and his decision to elevate the importance of asset and wealth management. , including alternatives.
Meanwhile, Waldron had briefly spoken to private equity firm Apollo about a prominent role and received overtures from other groups, crystallizing Goldman’s determination to retain him, three people familiar with the matter told the Financial Times.
“The company is delivering strong performance and the board is determined to maintain our momentum, ensure stability and maintain a strong succession plan,” Goldman said.
The size of Solomon and Waldron’s retention grants dwarfs even the $50 million five-year package that JPMorgan Chase awarded Jamie Dimon in 2021. Last year, Morgan Stanley created $20 million funds for the new director executive Ted Pick and the two men he competed for. the top job.
golden man It also gave Solomon and Waldron, as well as other top executives, bonuses based on the performance of their alternative asset funds, in addition to stocks and cash, for the first time. It’s a sign that the bank is starting to pay its top managers the same as major private equity firms.
The equity component of the annual pay package is awarded based on meeting Goldman’s share price and return on equity targets, while there is also a component tied to the bank’s funds based on their performance, a rate of payment known as “carry”.
Most banks and traditional asset managers use carry to reward their fund managers, but it is highly unusual to include it in the compensation of senior executives. Goldman said CFO Denis Coleman and lead lawyer Kathryn Ruemmler and others would also be paid this way.
The bank said it was “evolving compensation to enhance the firm’s ability to continue attracting and retaining the best talent at a time when competition for Goldman Sachs talent is especially fierce, including from asset managers and others.” non-banking entities”.
Goldman has been losing partners and top executives to asset managers, private equity and trading firms such as TPG, Citadel, Sixth Street and General Atlantic in recent years.
A senior Wall Street executive close to Goldman predicted that the big package for Waldron “will be enthusiastically received internally and by his partners. “He is very loved and respected throughout the industry.”
Additional reporting by Stephen Gandel and James Fontanella-Khan