Goldman Sachs paid chief executive David Solomon $25mn for his work in 2022, down almost 30 per cent during a year in which the Wall Street bank reported a 50 per cent drop in profits, cut jobs and slashed employee bonuses.
In a regulatory filing on Friday, Goldman disclosed that Solomon received a base salary of $2mn, and $23mn in variable compensation.
Goldman said its compensation committee based its decision in part on “the firm’s 2022 performance, both on an absolute basis and relative to peer results, as well as in comparison to the record performance delivered in 2021”.
The cut to Solomon’s pay is larger than at his bank’s rivals and reflects a challenging year for Goldman. Solomon’s pay for 2022 has been the subject of speculation among Goldman’s rank and file in recent weeks, with many expecting a sizeable cut for 2022 given the bank’s financial performance and a broad review of expenses at the company.
In 2022, Goldman’s net profits plunged almost 50 per cent from record earnings in 2021. Its investment banking business suffered from an industry-wide dearth of dealmaking activity, while Goldman was also hit by sharp markdowns in public equity holdings at its asset management division.
The bank also reported $2bn in losses for 2022 at its fledgling “Platform Solutions” division, which houses part of its pared-back retail banking business.
Goldman this month cut about 3,200 jobs, equivalent to roughly 6.5 per cent of its workforce, as part of the bank’s biggest cost-reduction exercise since the 2008 financial crisis. Goldman has also embarked on a review of spending across the bank, the Financial Times has reported.
The $35mn Solomon earned for 2021 made him the highest-paid big bank chief executive alongside Morgan Stanley boss James Gorman. In 2022, Gorman’s compensation was cut 10 per cent to $31.5mn.
JPMorgan Chase chief executive Jamie Dimon was paid $34.5mn in 2022, unchanged from the prior year, while Wells Fargo CEO Charlie Scharf’s pay was also flat at $24.5mn.
In response to the challenging environment, Goldman slashed bonuses at its investment banking division, while the bonus pool for Goldman’s senior partner ranks was down around 40 per cent, according to a person familiar with the matter.
Goldman’s overall spending on compensation and benefits for 2022 was down 15 per cent year on year at $15.1bn.
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