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The bonuses to Goldman Sachs CEOs David Solomon and President John Waldron are each worth $80 million and should be denied by bank shareholders, adviser Glass Lewis recommends.
In a report released Friday, the acting advisor said the duo’s awards announced by the bank in January were “a further exacerbated by their structure as they deviated from the historical use of performance-based equity awards.”
The bonus is completely stocked and not tied to performance conditions, the company said.
The “media headline” portrayed the “high-level poaching” experienced at banks, but shareholders were primarily receiving “boilerplate languages” about wage needs, Glass Lewis said.
“The lack of disclosure surrounding these elements of such substantive awards is awful, and that alone would guarantee a vote on this proposal this year,” he said in the report.
Goldman has given a five-year retention bonus to ensure that the top two executives remain in the bank. Waldron’s award solidified a popular view among Wall Street observers that he was Solomon’s ultimate successor.
The bonus is separate from Solomon and Waldron’s annual compensation, totaling $39 million and $38 million last year. They also warned the recent awards paid to top executives of rivals JPMorgan and Morgan Stanley.
Within Goldman, people familiar with the issue have been concerned that investors would refuse to have the so-called voice at the April 23rd annual general meeting of the investment bank in Dallas.
Top investors, including Vanguard, BlackRock and State Street, said in a statement: “The competition for our talent is fierce. The board took action to maintain our current leadership team, maintain the company’s momentum and maintain a strong succession plan.
The advisory vote adopted as part of Dodd Frank’s financial regulatory reform is non-binding. However, if a shareholder votes NO, it represents the bank’s public responsibilities.
In US banks, investors rarely vote against compensation plans. In recent years, only Jpmorgan Chase has faced such a rebellion. Shareholders were unhappy with the special award, which is projected to be worth around $50 million in 2022 for CEO Jamie Dimon. JPMorgan has since said it will not offer Dimon Special Awards in the future.
Goldman Sachs has repeatedly supported the Executive Pay Awards shareholders in 2024, down from 94% in the previous year to 86%.
Glass Lewis also warned shareholders about new carried interest surcharge plans for executives. The complexity of the plan makes it difficult for shareholders to assess their pay arrangements before the bonus is paid, the company said.
