Goldman Sachs CEO and COO’s $50 million bonus ‘exaggerated’

Goldman Sachs’ plan to pay chief executive David Solomon a one-time bonus of $30 million and chief operating officer John Waldron a $20 million bonus is “excessive,” proxy adviser Glass Lewis argued Friday.

The shareholder advisory firm urged Goldman shareholders to vote against the executive compensation package that includes the one-time gift bonuses.

“We are concerned about special, one-time benefits to the CEO and COO,” Glass Lewis said in a statement to shareholders reported the Financial Times called. “Such awards have the potential to undermine the integrity of a company’s regular incentive plans, the link between pay and performance, or both.”

Goldman has claimed that its compensation will “drive long-term value creation for shareholders” and “ensure continuity of leadership over the next five-plus years.” The multimillion-dollar stock awards won’t be paid until October 2026.

Glass Lewis said if shareholders are asked on April 28 whether to approve the pay packages, they should say no. So-called say-on-pay votes at public companies are strictly advisory, but when a company’s shareholders vote against a pay package, it can be seen as a black eye.

“We believe that long-term incentives should encourage leaders to achieve steady and sustained growth, rather than relatively brief peaks in performance,” said Glass Lewis.

Goldman Sachs did not immediately respond to requests for comment.

At Goldman, Solomon’s total compensation includes an annual base salary of $2 million and variable compensation of $33 million, 70% of which is in the form of goal-based stock awards or restricted stock units.

Solomon’s compensation matches that of his competitors. Morgan Stanley CEO James Gorman also raked in the same amount for 2021 — $35 million.

Solomon’s payday in 2021 doubled the $17.5 million he earned in 2020 – Solomon was docked after Goldman admitted wrongdoing in the 1MDB scandal that looted Malaysia’s sovereign wealth fund.

Meanwhile, bank stocks have fallen sharply so far this year, even after record results on the back of a banner year for mergers and acquisitions.

That’s because they’ve also reported significantly higher spending — in large part because of the hefty wage packages they’re handing out in a tight labor market.