Goldman Sachs has slashed its chief executive’s pay packet by almost 30% after a turbulent year that resulted in one of the largest round of job cuts in the Wall Street lender’s history.
The bank revealed on Friday that David Solomon had been paid $25m (£20m) for 2022, down from $35m a year earlier, after the bank revealed a 50% drop in annual profits following a slump in dealmaking. Solomon’s pay included a $2m base salary and $23m in bonuses.
It takes his pay back below his rival at JP Morgan, where the chief executive Jamie Dimon’s pay held steady at $34.5m for 2022. That was despite the bank suffering a 22% drop in annual profits.
Solomon, who also moonlights as a DJ under the moniker DJ D-Sol, also took a $10m hit to his 2020 pay packet after the bank was forced to pay billions of dollars to settle an international investigation into its role in the 1MDB scandal. That still left him with pay of $17.5m that year.
A person familiar with Solomon’s latest pay deal said: “As is always unique to Goldman Sachs, his compensation is aligned with the direction of compensation for the partnership, reflecting solid results in a challenging environment, but down from the records of 2021.”
Investment banks across the world have been grappling with a drop in demand after Russia’s invasion of Ukraine, which rattled global markets and made companies more cautious about pursuing deals and raising money on the financial markets, for fear their shares would be undervalued or they have to pay more for debt.
The slump in demand triggered mass layoffs at Goldman Sachs, which fired about 3,200 of its 49,000 global employees this month, primarily in its investment banking division.
However, some experts have noted that it is a return to a more normal banking layoff cycle, given that Goldman effectively froze its annual redundancy programme as dealmaking surged after the pandemic. Prior to the job cuts, Goldman’s staff headcount had grown roughly 30% since 2019.
