Goldman Sachs Group Inc. has increased David Solomon’s compensation by 24% to $31 million, despite a year of diminished earnings for the Wall Street giant. The decision to boost the chief executive officer’s pay came amidst a challenging year, during which the firm witnessed a 24% decline in profit and focused on resolving internal conflicts while promoting a streamlined strategy.
With the abandonment of its retail-banking ambitions, Goldman has reverted its attention to business lines favoured by Solomon’s predecessors. Solomon's compensation package, disclosed in a regulatory filing, includes a $2 million base salary and $29 million in variable compensation, with a significant portion allocated as restricted stock units totalling $20.3 million. Notably, Solomon's pay increase surpassed that of other major US bank CEOs whose compensation details have been disclosed.
This year's pay announcement was made following the conclusion of an annual executive gathering in Florida, contrasting with the timing of last year's announcement. Despite challenges, Goldman’s shares saw a 12% increase in 2023, ranking it fourth among the six largest US banks. The firm also initiated significant job cuts at the start of the year, eliminating approximately 3,200 positions.
Goldman faced obstacles in 2023, including sluggish capital markets affecting fee income and losses on real estate investments, alongside setbacks in its consumer strategy. These factors led to a notable decline in net income, totalling $8.52 billion for the year. The compensation committee attributed Solomon's increased pay to his “decisive leadership in recognizing the need to clarify and simplify the firm’s forward strategy," acknowledging short-term performance
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