While thousands of Goldman Sachs employees are fired due to the bad times the investment banking and securities group is going through, its CEO, David Solomon, was “punished” with a 30% cut in his salary, with which only will earn $25 million a year
Having a millionaire salary is the dream of any worker; However, for the CEO of Goldman Sachs, David Solomon, receiving $25 million dollars a year, after a 30% cut in his salary, is the way in which the investment and securities bank found to punish him for his bad step. in 2022.
According to Goldman Sachs, Solomon’s salary was reduced in 2022, while the global financial group is going through a difficult time, given a more than uncertain scenario in the economy of the United States and the world.
With the cut, the CEO of Goldman Sachs earned in 2022 the not inconsiderable amount of $25 million dollars; however, it was less than the $35 million dollars he took in in 2021.
The information about Solomon’s salary cut became public when Goldman Sachs announced thousands of layoffs as part of a strategy of adjustments in the financial corporation.
According to a Bloomberg report, Goldman Sachs began with massive layoffs from the second week of January, which will affect at least 4,000 employees, equivalent to 8% of its workforce.
The notice of the layoffs was signed by the CEO of the company, as has happened in other companies mainly in the technology sector, such as Google, which laid off 12,000 of its workers.
With the adjustment, Solomon now earns less than his peers at JPMorgan, whose CEO Jamie Dimon earned a salary of $34.5 million, while Morgan Stanley CEO James Gorman took $31.5 million.
How the salary of the CEO of Goldman Sachs is made up
The Goldman Sachs CEO’s salary is not fully integrated by his compensation as CEO of the securities and investment bank.
In reality, Solomon’s annual base salary has been flat for the past year; This means that his salary continued to be $2 million dollars a year.
However, annual variable compensation earnings were $23 million, according to reports from the US Securities and Exchange Commission.
Of this total, 70% corresponds to an annual variable compensation of $16.1 million that is part of restricted stock units that are conditional on Solomon’s performance, also known as “PSUs”.
The rest of Solomon’s annual variable compensation is paid to him in cash, according to federal reports.
To measure the salary of the CEO Goldman Sachs, the Compensation Committee of the financial corporation considers a tool known as the Performance Evaluation Framework.
In this, the Committee measures the financial performance of the company and other components such as risk management and personnel strategy.
2022 was not a good year for Solomon, as he announced the worst wave of layoffs in decades, plus mergers and acquisitions fell; losses of more than $3 billion were reported since 2020 in its consumer lending unit.
Additionally, Goldman Sachs reported that its net earnings fell about 48% to $11.3 billion in 2022, from $21.6 billion it reported in 2021.