Item 8.01 Other Events.
The Goldman Sachs Group, Inc. (the "Registrant," the "firm" or "we") today
announced that the Compensation Committee of the firm's Board of Directors has
determined the 2020 total annual compensation for David M. Solomon, our Chairman
and Chief Executive Officer, John E. Waldron, our President and Chief Operating
Officer, and Stephen M. Scherr, our Chief Financial Officer.
Mr. Solomon's total annual compensation for 2020 is $17,500,000, which compares
to total annual compensation for 2019 of $27,500,000. Mr. Solomon's 2020
compensation consists of an annual base salary of $2,000,000, which remains
unchanged from last year, and annual variable compensation of $15,500,000. 70%
of this annual variable compensation (i.e., $10,850,000) was granted in the form
of performance-based restricted stock units ("PSUs"), with the remainder to be
paid in the form of cash.
Mr. Waldron's total annual compensation for 2020 is $18,500,000, which compares
to total annual compensation for 2019 of $24,500,000. Mr. Waldron's 2020
compensation consists of an annual base salary of $1,850,000, which remains
unchanged from last year, and annual variable compensation of $16,650,000. 60%
of this annual variable compensation (i.e., $9,990,000) was granted in the form
of PSUs, with the remainder to be paid in the form of cash.
Mr. Scherr's total annual compensation for 2020 is $15,500,000, which compares
to total annual compensation for 2019 of $22,500,000. Mr. Scherr's 2020
compensation consists of an annual base salary of $1,850,000, which remains
unchanged from last year, and annual variable compensation of $13,650,000. 60%
of this annual variable compensation (i.e., $8,190,000) was granted in the form
of PSUs, with the remainder to be paid in the form of cash.
The PSUs tie 100% of each of Messrs. Solomon's, Waldron's and Scherr's annual
equity-based compensation to ongoing performance metrics.
These compensation amounts reflect the previously announced decision by the
Board of Directors to reduce 2020 compensation that would otherwise have been
paid to Messrs. Solomon, Waldron and Scherr by $10 million, $7 million and $7
million, respectively, as part of the Board's broader determination regarding
the compensation of certain past and current members of senior management in
light of the findings of the government and regulatory investigations and the
magnitude of the firm's settlement of government and regulatory matters relating
to 1Malaysia Development Berhad ("1MDB"). While none of Messrs. Solomon, Waldron
or Scherr was involved in or aware of the firm's participation in any illicit
activity at the time the firm arranged the 1MDB bond transactions, the Board
views the 1MDB matter as an institutional failure, inconsistent with the high
expectations it has for the firm.
The Compensation Committee was guided in its determination of 2020 compensation
by, among other things, the firm's Performance Assessment Framework, which is
comprised of identified financial performance metrics as well as non-financial
factors (i.e., client orientation; risk management; and leadership, culture and
values). To this end, in making 2020 compensation decisions, the Compensation
Committee considered these factors as well as, among other things, the firm's
strong performance in successfully navigating an unexpected and volatile
operating backdrop to meet the needs of clients - driving the firm's highest
full-year net revenues in more than a decade - and solid early progress in
executing on all three pillars of the firm's strategic goals, as well as Messrs.
Solomon's, Waldron's and Scherr's outstanding individual performance, including
each of their leadership in guiding the firm to achieve these results.
For the year ended December 31, 2020, the Registrant reported net revenues of
$44.6 billion, diluted earnings per common share of $24.74 and return on average
common shareholders' equity of 11.1%, as well as book value per share growth of
8.1%.
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