In October 2021, Goldman rolled out the Shareholder Value Creation Award for CEO David Solomon and President John Waldron, initially assigning the pair roughly $50 million in stock. After shareholders questioned the narrow scope, the board widened eligibility to more members of the management committee.
Now, roughly 20 executives still at the firm are set to receive awards that, at the current share price, tally to more than $500 million. Solomon is in line for the largest share at over $100 million, with Waldron also among the beneficiaries. The roster includes key business leaders Ashok Varadhan, Dan Dees and Marc Nachmann. Goldman has publicly detailed grants for only some individuals, and the ultimate total will be calculated once the five-year performance window closes later this month.
Half of the award value depends on hitting specific stock price levels. Goldman shares surpassed the threshold that unlocks the maximum on that piece. The other half rides on how Goldman stacks up against six peers identified for the end of the five-year period.
By that measure, Goldman outpaced nearly all six peers, with Bank of New York Mellon Corp. ahead of it and logging a 174% return over the period. BNY Mellon is led by Robin Vince, who previously served as Solomon's chief risk officer.
Goldman's stock is little changed this year, but the total return over the past five years is about 150% with dividends reinvested. For the peer comparison, the five-year return was measured starting Oct. 21, 2021.
Executive pay is a direct readout on how a bank's year actually went. Market Briefs covers Wall Street free every morning.
Wall Street rolled out special leadership incentives in 2021 during a breakneck stretch for deals, SPACs and meme-stock action. JPMorgan CEO Jamie Dimon is one of the higher profile examples, with a long-term award now valued at about $270 million.
Goldman's board said the program was designed to tie pay to measurable performance, keep leadership in place and deter poaching in a war for talent. That framing irked some employees, who noted the board had reduced Solomon's pay by $10 million earlier in 2021 over the bank's 1MDB bribery scandal. As leadership churned, most members of today's management committee are not eligible for the 2021 award; that group has grown to 45 over time.
There is precedent for off-cycle windfalls at the firm. In the years after the 2008 crisis, Goldman granted options instead of typical year-end bonuses to a few hundred executives. Once fully exercised, those options generated billions of dollars for Goldman partners, far more than standard bonuses would have delivered.
According to spokesperson Jennifer Zuccarelli, the package aims to tie pay to defined performance hurdles, promote continuity, and help keep top performers, noting, "It's no secret our firm has performed exceptionally well in the years since." Goldman has disclosed individual grants for only some executives, and the definitive figure will be set once the five-year period concludes later this month.
For everyday investors, this is a reminder of how multi-year pay plans can hinge on stock performance and rankings versus peers, not just annual goals. When those longer benchmarks hit, big payouts follow - and they tend to draw plenty of attention.
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