Goldman Sachs is giving CEO David Solomon and President John Waldron retention bonuses worth $80 million each, the bank disclosed Friday.
That’s on top of a 25.8% raise for Solomon that brings his 2024 pay to $39 million, from $31 million a year earlier.
In a third compensation move, Goldman rolled out a carried interest program that directly ties part of certain executives’ yearly – namely, Solomon, Waldron, CFO Denis Coleman and Chief Legal Officer Kathryn Ruemmler – to the bank’s efforts to grow its third-party alternatives business and make inroads against a funding world increasingly populated by private-credit options.
Solomon’s 2024 salary breaks down to a $2 million salary, an $8.33 million cash bonus, $25.9 million in performance stock units and $2.78 million in the carried interest program.
The $39 million total would make him the best-paid CEO among the six largest U.S.-based systemically important banks. That title last year belonged to James Gorman, now-former CEO of Morgan Stanley, who received $37 million. That was followed closely by JPMorgan Chase CEO Jamie Dimon, with $36 million.
Goldman’s compensation committee based the figure largely on the bank’s financial performance. Goldman’s fourth-quarter profits more than doubled, to $4.1 billion, the bank reported Wednesday. That included a 33% revenue increase for its global banking and markets division, along with record net annual revenue in equities. Equity traders’ revenue jumped 32% year over year, while equity underwriting revenues spiked 98%.
Goldman reported full-year net revenues of $53.51 billion for 2024. That’s up 15.7% over 2023’s $46.25 billion. The bank’s stock price, incidentally, jumped 48% on the year.
Beyond finances, the committee rewarded Solomon for “continued execution of [Goldman’s] narrowed strategic focus.” That’s no doubt a reference to the bank’s further de-emphasis on its consumer segment. Solomon said Wednesday its Apple Card contract runs through 2030 but “there’s some possibility that it won’t continue until that time frame.”
Meanwhile, Goldman moved to lock down Solomon until at least 2030. His $80 million retention bonus won’t vest until January of that year and hinges on his “continuous service with Goldman Sachs,” the bank wrote. The bonus is composed of 130,508 restricted stock units – each with a value of $612.99 as of Thursday’s stock-market close.
It’s the second such incentive for Solomon and Waldron in just over three years. Goldman in October 2021 gave the two executives one-time restricted stock bonuses worth roughly $30 million and $20 million, respectively. Those incentives are set to vest in October 2026.
Shareholders could push back against the bonuses at the bank’s annual meeting in the spring. Only 31% of JPMorgan shareholders, for example, voted to approve a $52 million retention bonus for Dimon, but the bank paid it out anyway.
Goldman’s board credited Solomon and Waldron’s “strategic leadership and performance over their tenures,” adding the incentives “reflect the Board’s desire to retain the current CEO and COO as a senior leadership team, sustain the strong momentum they have demonstrated in executing on our firmwide strategic priorities, help ensure stability and continuity in our senior leadership over the next five years and maintain a strong succession plan for the future of the firm.”
The bonuses can be clawed back over events constituting “cause.” That’s something Solomon experienced firsthand in the wake of the bank’s 1MDB scandal, when Goldman recaptured $10 million of the CEO’s compensation.
Goldman’s new carried interest program cements the bank’s charge into competition – and collaboration with private-equity firms. The bank on Monday announced it is creating a Capital Solutions Group that puts three components under one umbrella: Goldman’s financing group, which finds investors; a financial sponsors team that provides investment banking services to private-equity firms; and a piece of its fixed-income and equities trading group that makes loans tied to collateral.
The goal, Solomon said Monday, is to “operate at the fulcrum of one of the most important structural trends taking place in finance: the emergence and growth of private credit and other asset classes that can be privately deployed.”
“There is significant demand from our investing clients for private credit and private equity – from investment grade and leveraged lending to hybrid capital and asset-backed finance as well as equity,” Solomon said.
Private equity appeared fresh in the minds of Goldman’s compensation committee Friday. In its explanation of Solomon’s 2024 pay, the panel noted an “ongoing competitive threat for the firm’s talent at all levels, from both traditional banking peers as well as alternative asset managers and other non-bank liquidity providers.”
Goldman is the first of the six largest U.S. systemically important banks to report executive compensation this year. JPMorgan, Bank of America, Citi, Wells Fargo and Morgan Stanley will generally follow by the end of February.
