Shareholders of Goldman approve multimillion-dollar compensation deals for Solomon and Waldron, totaling $80 million.
In a surprising turn of events, Goldman Sachs, one of the world's leading investment banks, has faced criticism from shareholders and proxy advisers over its executive compensation packages. The latest controversy revolves around the retention bonuses given to CEO David Solomon and President John Waldron, which were met with weaker support compared to previous years.
The weaker support can be attributed to growing concerns over executive pay levels, evolving shareholder sentiments, and increased scrutiny of compensation practices. Proxy advisers, such as Glass Lewis, have taken a cautious stance, emphasizing the need for alignment with long-term shareholder interests.
Despite Goldman Sachs' strong financial performance in early 2025, which led to the cancellation of planned job cuts, shareholders have expressed a desire to balance executive rewards with broader corporate governance expectations. This is particularly true in the complex and recovering market environment.
Goldman Sachs prefers approval rates in the high 80s or 90s for say-on-pay resolutions. However, the say-on-pay resolution for its executives received only 50% support, a significant drop from the typical 90% support. This lower-than-expected support has raised questions about the bank's compensation practices and the need for transparency and clear business rationales for benefits.
Norges Bank Investment Management, for instance, has called for Goldman's board to provide transparency on total remuneration and ensure that all benefits have a clear business rationale. Glass Lewis has contended that the bonuses, totalling $80 million each, represent twice either executive's total compensation for 2024 and don't align with Goldman executives' performance.
Notably, a few Goldman shareholders, including Norway's sovereign wealth fund and the California State Teachers' Retirement System, voted against the pay packages. It is not specified whether Glass Lewis or ISS has issued any recommendations for Goldman Sachs' 2024 compensation package.
The bank has defended the bonuses, arguing that they are a means to prevent competitors from luring away Waldron. In comparison, the pay package from 2024 received 86% support from shareholders.
This is not an isolated incident, as other financial institutions may also come under fire for their executive compensation packages. For instance, in 2022, JPMorgan Chase's compensation plan for top executives, including a $52.6 million one-time award to CEO Jamie Dimon, was rejected by shareholders.
In a separate development, ISS urged Bank of America shareholders to reject the bank's compensation proposal for CEO Brian Moynihan's $35 million pay package for 2024, but the proposal was approved by shareholders. JPMorgan Chase paid Dimon despite the rejection, stating they would not hand out special awards in the future.
As the debate over executive compensation continues, it is clear that shareholders are becoming more critical of large retention awards, especially in financial institutions. Proxy advisory firms like Glass Lewis often recommend against excessive bonus packages that may not correlate clearly with company performance or shareholder returns. For specific voting statistics or detailed proxy adviser commentary, one would need to consult Goldman Sachs’ 2025 proxy statement or proxy adviser publications.
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