Goldman Sachs’ David Solomon latest CEO hit with pay cut

The Goldman Sachs Group cut CEO and chair David Solomon’s salary by $10 million in 2022, after Apple CEO Tim Cook suggested his own pay reduction earlier in the month. 

The investment bank’s board reduced Solomon’s salary to $25 million in 2022 from $35 million in 2021 based on Goldman Sachs’ performance assessment framework when compared with the firm’s performance in 2021. 

Goldman's 2022 net revenue fell 20% to $47.37 billion while net earnings dropped 49% to $10.76 billion.

Investment banking revenue plunged 48% to $7.36 billion.

Since taking the helm in 2018, Solomon has tried to diversify Goldman beyond its traditional powerhouses of trading — which languished after the 2008 financial crisis — and investment banking. But those divisions have become even more dominant, comprising 69% of the firm's revenue at the end of last year, versus 58% the year Solomon took over.

The CEO also championed Marcus, a retail banking business that faltered even as it attracted more than $100 billion in deposits.

Goldman's moves into consumer lending and transaction banking were "head scratchers," said Kush Goel, senior research analyst at asset manager Neuberger Berman, which owns the bank's stock. Instead, it should have followed rival Morgan Stanley, which earns a steady stream of income from wealth-management fees, he said.

Goldman's asset and wealth management unit generated 34% of its revenue in the fourth quarter, while Morgan Stanley derived 63% of its revenue from comparable divisions.

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Solomon’s salary breakdown

Of the $25 million earned in 2022, Solomon’s $2 million annual base salary was unchanged year-over-year. His variable compensation came to $23 million, comprising 70% in performance-based restricted stock units that tie directly to his equity-based compensation and ongoing performance metrics. The remainder to be paid in cash, according to the SEC filing.

Ticker	Security	Last	Change	Change %
GS	THE GOLDMAN SACHS GROUP INC.	608.57	+3.14	+0.52%

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Apple's Tim Cook

In a Securities and Exchange Commission filing earlier this month, Apple announced CEO Tim Cook would take a significant pay cut in 2023.

The filing stated Cook suggested his total compensation for 2023 would be $49 million this year after balanced shareholder feedback, a 40% decrease from what he raked in during 2022. 

Cook’s 2022 salary included $3 million in base salary and roughly $83 million in stock awards and bonuses.

Ticker	Security	Last	Change	Change %
AAPL	APPLE INC.	237.33	+2.40	+1.02%

Reuters contributed to this report.

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