Goldman Sachs Retains Solomon with $80 Million Bonus
Sunday, Jan 19, 2025 12:30 am ET
3min read Goldman Sachs has awarded CEO David Solomon and President John Waldron retention bonuses worth $80 million each, as the bank seeks to maintain its momentum and ensure stability in its senior leadership. The bonuses, which vest in five years, are part of the bank's effort to retain Solomon and Waldron as a senior leadership team, according to a regulatory filing on Friday.
The bonuses come as Goldman Sachs reported a 26% increase in Solomon's 2024 compensation to $39 million, reflecting the bank's strong financial performance. The bank's fourth-quarter profits more than doubled, to $4.1 billion, driven by a 33% revenue increase for its global banking and markets division and record net annual revenue in equities.
Goldman Sachs' share price jumped almost 2% on Friday afternoon, following the announcement of the bonuses. The bank's share price has also risen 48% in the last year and is up 174% since Solomon took over in 2018.
"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," said Tony Fratto, a spokesperson for Goldman Sachs. "The board is also evolving compensation to enhance the firm’s ability to continue to attract and retain the best talent at a time when the competition for Goldman Sachs talent is especially fierce, including from asset managers and other non-banks."
Solomon, 63, has faced off doubters as the bank's stock rallied, markets rebounded, and he slimmed down Goldman's retail operations. Waldron, 55, is seen as Solomon's closest lieutenant and is widely regarded as a potential successor.
The retention bonuses for Solomon and Waldron come as CEO succession is in focus across Wall Street. Investors are paying close attention to the long tenures of executives running the largest U.S. banks, including Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America.
Goldman Sachs' compensation committee based Solomon's 2024 pay largely on the bank's financial performance and his continued execution of the firm's narrowed strategic focus. The committee also noted an ongoing competitive threat for the firm's talent at all levels, from both traditional banking peers and alternative asset managers and other non-bank liquidity providers.
In conclusion, Goldman Sachs' retention bonuses for David Solomon and John Waldron demonstrate the bank's commitment to maintaining its momentum and ensuring stability in its senior leadership. The bonuses, along with the bank's strong financial performance, have contributed to a significant increase in Solomon's compensation and a rise in the bank's share price. As CEO succession remains a focus across Wall Street, Goldman Sachs' retention of Solomon and Waldron signals the bank's confidence in its leadership and its ability to attract and retain top talent.
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