Goldman Sachs CEO David Solomon gets $10M pay cut over 1MDB scandal
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Goldman Sachs slashed CEO David Solomon’s pay by $10 million as a consequence of the megabank’s involvement in the 1MDB corruption case.
The Wall Street giant shrank Solomon’s cash and stock compensation package to $17.5 million last year from $27.5 million in 2019 after one of Goldman’s units pleaded guilty to federal charges over its role in the star-studded scandal centered on a Malaysian development fund.
The firm first said in October that it would sanction Solomon, ex-CEO Lloyd Blankfein and other top executives because of Goldman’s entanglement in the mess, which led American and Malaysian authorities to fine the bank more than $5 billion.
While Solomon, who took over as CEO in 2018, wasn’t involved in any of the illicit activity, Goldman’s board “views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm,” the bank said in a Tuesday regulatory filing.
Prosecutors have said fugitive financier Jho Low and others siphoned some $4.5 billion from the 1 Malaysia Development Berhad fund and spent it on corrupt purposes instead of building the country’s economy. Goldman underwrote $6.5 billion in bond offerings for the state-backed fund in 2012 and 2013.
Goldman also cut the pay of chief operating officer John Waldron and finance chief Stephen Scherr in light of the 1MDB scandal. Waldron’s compensation dropped by $6 million to $18.5 million last year, while Scherr’s was slashed by $7 million to $15.5 million, according to the regulatory filing.
Solomon took the pay cut as one of his fellow Wall Street titans, Morgan Stanley CEO James Gorman, got a hefty raise. The bank on Friday hiked Gorman’s 2020 pay by 22 percent to $33 million, noting that he led the bank to a “record financial performance” last year.
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