Goldman Sachs gave its top two executives retention awards worth $80 million each and launched a program to give its leaders a share of the carry interest (“carried interest”) obtained in investment funds private equitywhile trying to compete on compensation with leading alternative asset managers.
The retention awards are the second given to CEO David Solomon and president John Waldron, who is also the chief operating officer, in just over three years. They “reflect the Board’s desire to retain the current CEO and COO as a senior leadership team,” according to a statement Friday.
The retention stock bonuses will be released in January 2030, meaning Solomon, who has held the top role for more than six years, and Waldron will need to stay with the company for another five years to receive the amount.
Goldman also gave Solomon a $39 million compensation package for 2024, a year in which the bank’s profits soar. The award, released in a statement on Friday, represents a 26% increase over Solomon’s package from the previous year, which was $31 million.
Goldman Sachs aims to compete more directly with private equity in fundraising for its alternative assets unit and has seen leaders of these buyout rivals — several of whom are former Goldman employees — receive long-term bonuses on a scale rarely seen in the banking industry.
The board “considered the unique competitive threats to talent that Goldman Sachs faces, including from alternative management firms and others beyond the traditional banking sector,” the company said in the statement. “As a top five alternative asset manager, Goldman Sachs is especially well positioned among its banking peers to be able to offer senior leaders the opportunity to earn carry interest.”
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Solomon received a previous retention package in late 2021 when the company cited a “war for talent.” These prizes, which at current performance levels would be worth at least $50 million, required stocks to reach certain milestones and outperform competitors to unlock the full prize. The retention awards announced Friday have no such performance metrics, requiring only that the two executives remain.
Other executives who should receive greater incentives thanks to the so-called Carry Interest include Chief Financial Officer Denis Coleman and General Counsel Kathryn Ruemmler, as well as other executives not named in the statement.
The increase in pay and incentives comes just two days after Goldman reported a fourth-quarter profit that doubled from a year earlier and included record gains for the company’s stock traders. The bank also returned record annual value to shareholders in the form of share buybacks and dividends in 2024.
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