Goldman Sachs Group Inc.’s executive pay proposal won majority support from shareholders despite criticism the bonuses were excessive, easing concerns over the firm’s push to retain top talent as it competes with buyout firms.
The investment bank, which argued a pair of $80 million retention bonuses for its chief executive and president were justified given the war for talent with buyout firms, said it won 66% of the vote in a non-binding ballot at its annual general meeting in Dallas on Wednesday.
The pay proposal triggered controversy in particular for the size of the retention awards and because they aren’t linked to performance — only requiring David Solomon and John Waldron to remain at Goldman until January 2030.
The approval from shareholders bolsters the firm’s claims that it needs to pay big to retain its executives while it pushes to compete with deep-pocketed private market investors.
The “say on pay” proposal was put in place in response to outcry about oversize executive-pay packages following the 2008 financial crisis. It gives shareholders an advisory vote on how company executives are compensated. Even though it’s non-binding, meaning that there’s no ability to force change, companies typically seek to assuage shareholder consternation and address their concerns.
Goldman shareholders have expressed majority support for how it pays senior executives since the firm began seeking their nod in the wake of the 2008 financial crisis.
Last year, Goldman won 86% of the vote from shareholders, despite opposition from advisory firm Glass Lewis & Co., which also opposed this year’s proposal. Late last month, it called the bank’s discussion around the $160 million of retention bonuses “far from robust.”
Under Solomon’s tenure, payouts for its top brass have been a thorny issue that until now was mostly expressed by the bank’s partner class. Some privately grumbled that packages for its leaders were excessive relative to the firm’s performance and the awards being set aside for the rest of the staff.
Before this year, the most opposition that Goldman had ever drawn to its compensation plan since shareholders were able to vote on it was in 2016. At the time, about a third of the votes cast went against the proposal.
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