Goldman Sachs shareholders on Wednesday supported a measure to give CEO David Solomon and President John Waldron each an $80 million retention bonus.
But the say-on-pay resolution received markedly less backing – 66% – than Goldman’s executive compensation last year.
By comparison, the pay package from 2024 received 86% support from shareholders. Wednesday’s vote showed the weakest backing in roughly a decade.
Proxy adviser Glass Lewis had urged investors last month to reject Solomon and Waldron’s one-time bonuses, arguing each award represents twice either executive’s total compensation for 2024. The firm also contended the pay package doesn’t align with Goldman executives’ performance, raising “significant concerns.”
Glass Lewis last year also sought to rally investors against Solomon’s compensation.
Goldman has defended the bonuses, which vest after five years, as a means to prevent competitors from luring away Waldron, who is also the lender’s chief operating officer and a potential successor to Solomon. Waldron was also given a Goldman board seat in February.
The bonuses came on top of raises well above 20% for each executive.
A couple of Goldman shareholders voted against the pay packages, including Norway’s sovereign wealth fund and the California State Teachers’ Retirement System.
Norges Bank Investment Management told the Financial Times that Goldman’s board should “provide transparency on total remuneration to avoid unacceptable outcomes” and also “ensure that all benefits have a clear business rationale.”
Say-on-pay resolutions typically receive over 90% support, Kelly Malafis, founding partner at Compensation Advisory Partners told American Banker. While a 50% vote is a pass, companies prefer approval rates in the high 80s or 90s. However, proxy advisers have specific thresholds: Glass Lewis’ peer, Institutional Shareholder Services, expects companies that receive less than 70% support to demonstrate “compensation committee responsiveness” in their next proxy statement. Glass Lewis sets an even higher standard, expecting companies that receive less than 80% approval to conduct shareholder outreach.
The Securities and Exchange Commission requires public companies to provide their shareholders with an advisory vote on the compensation offered to some executives. The votes are nonbinding, meaning the company has the discretion to decide whether or not to implement the proposal in question.
In 2022, shareholders rejected JPMorgan Chase’s 2021 compensation plan for its top executives, including a $52.6 million one-time award to CEO Jamie Dimon. The measure received 31% support, but the bank paid Dimon anyway, adding that it would not hand out special awards in the future.
Goldman is not the only bank to come under fire from the proxy advisers. Earlier this month, Glass Lewis criticized the $52.25 million in awards that Citi granted to its head of banking, Vis Raghavan, and recommended shareholders vote against it.
ISS, meanwhile, urged shareholders of Bank of America to reject the bank’s compensation proposal for its CEO Brian Moynihan’s $35 million pay package for 2024. BofA shareholders approved the bank’s executive pay package Tuesday.
