Item 8.01 Other Events.
2021 Annual Compensation for David Solomon
The Goldman Sachs Group, Inc. (the "Registrant," the "firm" or "we") today
announced that the Board of Directors ("Board"), upon the recommendation of the
Compensation Committee, has determined the 2021 total annual compensation for
David M. Solomon, our Chairman and Chief Executive Officer.
Mr. Solomon's total annual compensation for 2021 is $35 million (which consists
of an annual base salary of $2 million unchanged from 2020, as well as annual
variable compensation, described below). This compares to total annual
compensation for 2020 of $27.5 million (before the $10 million reduction
determined by the Board related to the settlement of matters relating to
1Malaysia Development Berhad).
Mr. Solomon's 2021 annual variable compensation is $33 million, 70% of which
(i.e., $23.1 million) is in the form of performance-based restricted stock units
("PSUs"), with the remainder to be paid in the form of cash. PSUs tie 100% of
Mr. Solomon's annual equity-based compensation to ongoing performance metrics.
The Compensation Committee was guided in its determination of 2021 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 people strategy
scorecard). To this end, in making 2021 compensation decisions, the Compensation
Committee considered these factors as well as, among other things, the firm's
performance and continued strong progress on its growth strategy, as well as
Mr. Solomon's outstanding individual performance, including his leadership in
guiding the firm to achieve these results.
For the year ended December 31, 2021, the Registrant reported record net
revenues of $59.34 billion, record net earnings of $21.64 billion, record
diluted earnings per common share of $59.45 and return on average common
shareholders' equity of 23.0% (the firm's highest since 2007). For 2021, the
firm also delivered book value per share growth of 20.4% and total shareholder
return ("TSR") of 47.5%.
Shareholder Value Creation Awards
We also announced today that the Board, upon the recommendation of the
Compensation Committee, determined to grant Shareholder Value Creation Awards,
in the same form as was granted to Mr. Solomon and John E. Waldron (President
and Chief Operating Officer) in October 2021, more broadly across the members of
our Management Committee, including to revenue division heads and leaders of our
control, finance and operating divisions.
These awards broaden the scope of the three key objectives of the Shareholder
Value Creation Awards: (1) align compensation with rigorous performance
thresholds that drive long-term shareholder value creation; (2) ensure
leadership continuity over the next 5+ years in the next phase of Goldman Sachs'
growth strategy; and (3) enhance retention in response to the increasing
competition for talent in the current environment.
In granting these Shareholder Value Creation Awards, the Board sought to be
responsive to shareholder feedback regarding the importance of addressing these
three objectives across the firm's senior leadership team. The Board believes
providing Shareholder Value Creation Awards with the same terms as those granted
to Messrs. Solomon and Waldron to Management Committee members, including our
Executive Officers, will further enhance collaboration and teamwork by aligning
the incentive structure across the firm's most senior leaders.
In addition, in support of these goals and in order to further tie annual
compensation to ongoing performance metrics, our Compensation Committee
determined that 2021 year-end equity-based compensation for all of the members
of our Management Committee, including our Executive Officers, should be 100% in
PSUs (consistent with the existing pay mix for Messrs. Solomon and Waldron).
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Similar to the Shareholder Value Creation Awards granted to Messrs. Solomon and
Waldron in October 2021 (and described on a Form 8-K filed by the Registrant on
October 22, 2021), the Management Committee Shareholder Value Creation Awards
are not part of 2021 annual compensation and will not be awarded on a regularly
recurring basis. These awards are based on the same conversion price, are
subject to the same performance and time-based vesting conditions (including the
rigorous pre-established absolute TSR goals and relative TSR goals), and, except
for limited circumstances to comply with certain non-US regulatory requirements,
otherwise have terms that are identical to those of the Shareholder Value
Creation Awards granted to Messrs. Solomon and Waldron, including transfer
restrictions, forfeiture and clawback provisions, as described in the
Registrant's October 22, 2021 Form 8-K.
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