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Goldman’s David Solomon takes near-30% pay cut to $25mn

Goldman Sachs paid chief executive David Solomon $25mn for 2022, down almost 30 per cent compared to a year before, after the Wall Street bank reported a steep drop in profits, cut thousands of 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 pay.

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”.

Solomon’s pay for 2022 had been the subject of speculation among Goldman’s rank and file in recent weeks, with many expecting a sizeable cut given the bank’s financial performance and a far-reaching review of expenses at the company.

The cut to Solomon’s pay is larger than that taken by Wall Street peers and reflects a challenging year for Goldman. However, it is still less than the cut to the bonus pool for the group’s senior partner ranks, which is roughly 40 per cent, said people familiar with the matter.

Last year, Goldman’s net profits plunged almost 50 per cent from record earnings in 2021 and the bank fell short of a key profitability target. Its investment banking business suffered from an industry-wide dearth of dealmaking activity, resulting in a cut to bonuses for employees in that unit.

Goldman was also hit by sharp markdowns in public equity holdings at its asset management division and reported $2bn in losses for 2022 at its fledgling “Platform Solutions” unit, which houses part of its retail banking business that has been pared-back following disappointing performance.

The bank this month cut about 3,200 jobs, equivalent to roughly 6.5 per cent of its workforce, as part of its biggest cost-reduction exercise since the 2008 financial crisis. Goldman has also embarked on a review of spending across the group, 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 pay 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.

Goldman’s overall spending on pay and benefits for 2022 was down 15 per cent year on year at $15.1bn.

Solomon’s pay for 2022 is his lowest since the $17.5mn he earned in 2020 when his pay was hit by Goldman’s involvement in the 1MDB corruption scandal.

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