Tag Archives: David Solomon

Goldman Sachs Cut CEO David Solomon’s Pay to $25 Million in 2022

Goldman Sachs Group Inc.

GS 0.07%

Chief Executive

David Solomon

took a nearly 30% pay cut in 2022.

Mr. Solomon received $25 million in total compensation last year, down from $35 million in 2021. His 2022 pay package consisted of a $2 million base salary, a cash bonus of $6.9 million and a $16.1 million stock award that is tied to how well the bank performs in the next few years, Goldman said in a regulatory filing.

Mr. Solomon’s 2022 compensation reflects the bank’s performance compared with 2021, Goldman said in the filing. Profit fell 48% last year, and revenue declined 20%, largely due to a slowdown in corporate deal-making that had previously fueled blockbuster earnings. Still, Goldman shares outperformed the KBW Nasdaq Bank Index and the broader S&P 500 last year. 

In 2021, the bank’s shares were soaring and the bank was minting money in a merger boom that kept its high-price bankers busy. 

Goldman doubled Mr. Solomon’s pay that year, an acknowledgment of the bank’s record profits and following a year when he was penalized for the firm’s involvement in the 1MDB corruption scandal. The bank also awarded Mr. Solomon a one-time stock award of about $30 million that year, citing “the rapidly increasing war for talent in the current environment.”

Late last year, Mr. Solomon engineered a restructuring of Goldman’s businesses meant to spotlight steadier businesses like asset and wealth management, taking some of the focus off its more volatile Wall Street operations. 

He’s also paring back the bank’s consumer-facing Marcus operations and has admitted that Goldman’s attempts to do too much there contributed to missteps. The bank’s newly created Platform Solutions division, which houses credit cards and other pieces of the consumer business, lost about $2 billion on a pretax basis in 2022. 

Mr. Solomon has moved to cut costs at Goldman. The bank laid off some 3,000 employees this month and slashed bonuses for many bankers by up to 40%. 

Goldman’s compensation committee also considered the bank’s “continued progress in its strategic evolution as well as Mr. Solomon’s strong individual performance and effective leadership,” according to the filing. 

Mr. Solomon’s pay fell more than his Wall Street counterparts. 

Morgan Stanley

paid Chief Executive James Gorman $31.5 million for his work in 2022, a 10% pay cut from the year before.

 JPMorgan Chase

& Co. awarded CEO Jamie Dimon $34.5 million in 2022 compensation, in line with a year earlier.

Wells Fargo

& Co. CEO Charles Scharf’s 2022 pay also stayed flat at $24.5 million in 2022.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Goldman Sachs yanks ‘free coffee’ perk as bankers return to five-day week

It’s time for Goldman Sachs bankers to wake up and smell the coffee — and pay for it, too.

As employees filed into the Wall Street giant’s headquarters in lower Manhattan last Tuesday for a mandatory return to a five-day work week, they got an unwelcome surprise: The “free coffee” station had been wheeled away, sources told The Post.

The complimentary “grab and go” station at the entrance of 200 West St. — cold-brew, as well as stashes of French vanilla creamer, almond milk, soy milk and half-and-half — had appeared during the pandemic to encourage attendance, according to insiders.

But the brass has since determined it doesn’t need sweeteners to get people back to the office, sources told The Post. Instead, management now believes the threat of getting fired should more than enough incentive, the sources said.

“RIP to another pandemic perk for junior bankers,” one junior Goldman banker lamented. “I’m sure the partners still don’t have to pay for their coffee — or anything in their fancy dining hall.”

“Of course they took the coffee away,” another junior banker added. “But I’ve been so slammed since Labor Day I haven’t really had time to think too much about it.”

Natural gas prices are displayed in front of Morgan Stanley in the Times Square neighborhood of New York.
Bloomberg via Getty Images

As for coffee, a source close to the bank notes there is still free drip coffee elsewhere in the building, including at the building’s “Sky Lobby” on the 11th floor. The source added the bank also provided cupcakes to employees on their first day back. Still, junior employees counter that it’s a hassle to get to and doesn’t have the same quality of cold brew.

At other banks on Wall Street, executives and CEOs are embracing the return to normalcy — and the disappearance of perks that many had long taken for granted.

At Goldman as well as rivals JPMorgan an Morgan Stanley, bankers at all levels are lamenting the loss of free tickets to the US Open tennis championship in Forest Hills, Queens. Before the pandemic, the big banks typically made extra tickets available to top performers. But this year, the only way to nab a seat is to bring a client, sources add.

Spokespeople at JPMorgan and Morgan Stanley declined to comment on the US Open perks.

JPMorgan CEO Jamie Dimon, for his part, has grown increasingly aggressive with a clampdown on remote work, privately telling senior managers he expects the rank and file to be at the office five days a week — a more stringent standard than the bank’s official line of three days a week, according to sources close to the company.

But it’s Goldman CEO David Solomon — who famously called working from home an “aberration” — who has signaled the return to office with particular force. As first reported by The Post, Goldman told workers in a memo last month it planned to lift all COVID protocols a week after Labor Day — a sign it won’t accept excuses for employees to work from home.

In April, Solomon ended free daily car rides to and from the office, which the bank had begun offering at the start of the COVID outbreak, The Post was first to report. It now limits the perk to employees who work well into the evening, sources said.

Workers at Goldman Sachs filed into 200 West Street last week.
Bloomberg via Getty Images

This spring, Goldman likewise announced that employees will once again be on the hook for the cost of breakfast and lunch.Goldman did hike its meal allowance for dinner to $30 from $25 — two months after The Post reported staff were griping they couldn’t even buy a Chipotle dinner with the stingy stipend.

For some employees, however, part of Goldman’s allure is the prestige of working long hours in addition to getting face time with the boss.

“There’s a pride that comes with working crazy hours — and Goldman thinks the best will want what Solomon is demanding,” John Breault, CEO of recruiting firm Breault & Smith told The Post.

Other banks have taken a more relaxed approach to returning to the office. Citigroup CEO Jane Fraser — who famously banned Zoom meetings on Fridays in response to employee fatigue — has refrained from requiring a five-day work week although the bank asked most employees to return at least a few days a week in March.

Bank of America CEO Brian Moynihan, meanwhile, has said he will give more guidance about returning to the office in the next six to eight weeks — and will outline “more formality to the flexibility.”

Not all of the rank and file are convinced.

“Citibank and Bank of America are the lame banks,” one 20-something Wall Street banker who works at a boutique firm told The Post, adding he’d never take a job there.

Still, some of the young bankers who have landed prize gigs at Goldman and JPMorgan say they wish they had more flexibility.

“I’d prefer not to be in the office five days a week,” one junior banker conceded.

“I don’t think anyone wants to be in the office five days a week,” a former Goldman employee, who left to find a more flexible role, told The Post.

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Madcap Markets Push Goldman Sachs To Higher Trading Revenue, but Profit Falls

Goldman Sachs Group Inc.

GS 2.51%

said Monday that second-quarter earnings fell 47%, capping an earnings season where weak and volatile markets crimped investment banking revenue across the industry but boosted trading.

But what was bad for investment bankers was good for traders. Widespread volatility meant investors placed more trades across a variety of asset classes, and banks took advantage. At Goldman, second-quarter trading revenue rose 32% to $6.5 billion. The other banks also reported big increases in trading revenue.

However, all the major U.S. banks reported double-digit declines in profit, and most of them missed analysts’ expectations. Year-ago results were juiced by reserve releases across the industry, when the banks let go of some of the money they had socked away for pandemic losses.

This year so far has marked a comedown from what had been near-perfect conditions for Wall Street at the height of the pandemic. The stimulus from governments and central bankers in response to Covid led to a swift recovery from a recession and ebullient capital markets. The effects of the pandemic also led to changes in how customers and businesses operate, which sent corporate chieftains on a deal making spree.

The current environment is far less friendly. The highest inflation in decades, sharply higher interest rates, and significant geopolitical concerns have sent markets for a loop, with the S&P 500 recently finishing its worst first half in more than 50 years. That uncertainty has given corporate executives pause about taking their companies public or selling additional stock.

Likewise, the U.S. economy has been flashing disparate signals about its health. The finances of U.S. consumers and businesses remain relatively strong. Executives at Bank of America, which also reported second-quarter results on Monday, said their customers were spending and borrowing at a strong clip.

But higher costs for groceries, gas and rent are hurting many consumers, and U.S. households have started spending some of the savings they accumulated during the pandemic. Bank executives across the industry are concerned about a possible recession, although they haven’t seen clear evidence of one just yet.

Goldman CEO David Solomon noted conflicting signals on the inflation outlook.



Photo:

patrick t. fallon/Agence France-Presse/Getty Images

Goldman CEO

David Solomon

pointed to conflicting signals on the inflation outlook Monday. He said the bank’s corporate clients continue to experience persistent inflation in their own supply chains, but added that the firm’s economists expect inflation to slow in the rest of the year.

Goldman’s second-quarter profit fell to $2.9 billion from $5.5 billion a year ago. Revenue fell 23% to $11.9 billion, though both beat the expectations of analysts polled by FactSet.

Bank of America’s profit fell 32% to $6.2 billion and revenue rose 6% to $22.7 billion.

Goldman shares rose 2.5%. Bank of America shares were roughly flat.

Within the investment banks, stock-selling businesses were hit especially hard. In 2021, companies raced to go public via initial public offerings and blank-check companies known as SPACs. That activity has ground to a halt so far this year.

Goldman is planning to slow its hiring pace in the second half of the year, after staffing up for the pandemic deal making boom. The bank had 47,000 employees at the end of June, up from about 41,000 a year ago. Finance chief

Denis Coleman

also said the bank would bring back annual performance reviews for its workers, a practice Goldman had mostly suspended during the pandemic.

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Citigroup executives said last week they expected the slowdown to be temporary and wouldn’t change their pace of hiring more investment bankers. “You’re going to see us take a strategic look at this and a long-term look rather than just a shooting from the hip on the expenses side, because we’re building the firm for the long term here,” CEO

Jane Fraser

said.

At Bank of America, where total investment banking revenue fell 46%, Chief Financial Officer

Alastair Borthwick

said investment banking would “rise back to more normal levels in the next few quarters when economic uncertainty becomes more muted.”

Total trading revenue grew 25% at Citigroup, 21% at Morgan Stanley, 15% at JPMorgan and 11% at Bank of America. Goldman’s 32% jump was powered by a big rise in fixed income, currencies and commodities.

JPMorgan generated more trading revenue than any second quarter except during the middle of the pandemic and notched its best-ever second quarter for equities trading.

“Trading markets whipsawed with each release of economic data during the quarter,”

Daniel Pinto,

JPMorgan’s president and the head of the corporate and investment bank, told staff in a memo last week.

Write to Charley Grant at charles.grant@wsj.com

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