Goldman Sachs CEO David Solomon received a retention bonus of $80 million worth of reserved stock along with a pay rise to $39 million to stay for another five years. John Waldron, Goldman Sachs’ president and COO, who is often considered a potential successor to Solomon, was also given an $80 million retention bonus in restricted stock, according to a regulatory filing on January 17.
The restricted stock will vest in five years, which is an effort to retain both Solomon and Waldron in leadership roles for another five years. CEO David Solomon’s pay was increased by 26%, bringing his salary to $39 million. CEO succession is a hot topic on Wall Street. With leaders like Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America, investors are paying close attention to the long tenures of executives at the biggest U.S. banks.
Goldman Sachs CEO Bonus
Solomon’s compensation increased from $31 million in 2023. For 2024, he received a $2 million base salary, an $8.3 million cash bonus, along with stock and a new incentive award. The decision to retain Solomon comes after an end of difficult situations. In 2022, Goldman’s banking activities declined, and consumer business lost money, hinting at Solomon’s job risk and increase in his leadership criticism.
At 63, Solomon has proven his critics wrong as the bank’s stock rose, markets bounced back, and he streamlined Goldman’s retail operations. During 2024, the company’s share price increased by 48% and gained by 174% since Solomon took over as CEO in 2018. Tony Fratto, Goldman Sachs spokesperson said, “The firm is delivering strong performance and the board is determined to maintain our momentum, ensure stability, and keep in place a solid succession plan.”
Goldman Sachs Quarterly Earnings Boost
Goldman Sachs exceeded Wall Street expectations with its fourth quarterly report. It was the biggest quarterly profit reported in the last three years as investment bankers earned higher deal fees, while traders gained from active market conditions. Net income reached $4.11 billion in the fourth quarter, the bank reported on Wednesday.
In December, Solomon told the Reuters Next conference that he would continue leading the bank as long as the board wants him to stay. On January 17, Goldman Sachs’s stock price increased by 2% in the afternoon.
Goldman Sach’s Leadership Plan
Goldman Sachs is securing its leadership for the long term with significant retention bonuses for both CEO David Solomon and President John Waldron. Solomon’s pay raise and the vested stock incentives highlight the bank’s commitment to stability and growth, despite past challenges. With strong performance and a clear succession plan, Goldman Sachs is poised to maintain its momentum, ensuring continued success and leadership in the financial sector.
