Goldman boss Solomon takes 30pc pay cut

THE boss of Goldman Sachs has had his pay cut by almost a third to $25m (£20m) as the Wall Street bank races to cut costs after a sharp fall in profits.

David Solomon was paid a base salary of $2m and received variable compensation of $23m for 2022. The total pay packet was down from $35m the previous year. Goldman’s compensation committee pointed to the “challenging operating environment” as a factor in the pay cut, though it also praised Mr Solomon’s “strong individual performance and effective leadership”.

It comes after a torrid year for the investment banking giant, whose profts and share price have tumbled and which has announced one of the biggest job cuts in its history. Goldman pumped billions of dollars into its efforts to launch a consumer bank, named Marcus, but it has racked up pre-tax losses of $3.8bn over the last three years.

It has also suffered from an industrywide slowdown as dealmaking dries up amid rising interest rates.

Goldman’s net profit plunged by almost 50pc to $11.3bn last year. Its return on equity – a key measure of profitability – stood at 10.2pc, well below the 14pc to 16pc target the bank set for itself earlier in the year.

The challenges prompted Goldman this month to announce plans to cut 3,200 jobs, equivalent to 6.5pc of its workforce, in an effort to keep a lid on costs. The bank is also reviewing its expenses, including bonuses and its purchase of two private jets that Mr Solomon has used to help with his hobby as a dance music DJ.

Shares in Goldman Sachs dropped 10pc this year, though this was less severe than the 12pc decline in the S&P 500 Financials Index.

Mr Solomon’s pay cut is the largest among his peers so far. Morgan Stanley chief executive James Gorman saw his pay reduced by 10pc to $31.5m for 2022, while at JP Morgan, Jamie Dimon’s pay held steady at $34.5m.

Last year, influential proxy advisory firm Glass Lewis urged shareholders to vote against pay packages that included one-off stock grants for Mr Solomon and John Waldron, the bank’s president. However, their compensation was later approved by investors.