For decades, a top spot at Goldman Sachs Group Inc. was seen as the pinnacle of money and power. But in today’s era of hyper-wealth creation, the bank’s most senior leaders have come to believe they’re not getting paid enough.
Chief Executive Officer David Solomon and his deputies, who’ve contended with mounting pressure to reward trainees this year, have been searching for ways to juice their own eight-digit pay packages.
Among the ideas floated: partaking in a cut of the richest rewards thrown off by Goldman’s own SPACs, the blank-check companies that are all the rage on Wall Street. They’ve also laid the groundwork for big raises heading into 2022 and pressed, with some success, for incentive packages.
The notion that top bankers reeling in more than $20 million a year are underpaid is yet another exclamation point on this era of turbocharged wealth. At a time when Elon Musk is worth $300 billion — and each day seems to bring news of another fortune in technology, crypto and private equity — the old yardsticks of success are being tossed out.
Yet, ever since the 2008 financial crisis, board members at investment banks have faced pressure to keep a lid on pay for senior managers. That especially applies to so-called NEOs, or named executive officers, whose compensation is routinely disclosed and closely watched.
Now, as Wall Street firms set revenue and profit records, junior bankers are finagling raises to put themselves well above $100,000 a year. Veteran dealmakers and traders are hopping between firms to get better pay and positions. And some executives at the top are feeling the limits of what they can take home — leaving them to ponder the lucre that could be earned elsewhere.
Solomon's total stake in Goldman including unvested stock is worth more than $180 million. The board awarded him $27.5 million for his performance in 2019, his first full year as CEO, and the same amount again for 2020. Then in October, it announced a surprise $50 million bonus plan to be shared between him and a deputy, John Waldron.
But even that was a watered-down version of a more ambitious reward Goldman’s leadership team had previously sought.
This account of compensation deliberations within the firm is drawn from interviews with nine people with knowledge of the situation who spoke on the condition they not be named describing internal discussions.
"We have offered co-investment opportunities for our senior executives that align interests with investors. That the board of directors would explore additional opportunities is hardly surprising," said Pat Scanlan, a spokesman for the bank.