8-KLeadership Changes

GOLDMAN SACHS GROUP INC 8-K Report, Executive Changes (Jan 24, 2017)

Filed January 24, 2017For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

This 8-K filing from The Goldman Sachs Group, Inc. (GS) details significant changes related to Gary D. Cohn's departure from his roles as President and Chief Operating Officer to accept a position as Director of the National Economic Council (NEC) in the U.S. government. Due to federal ethics laws, Mr. Cohn was required to divest all financial interests in Goldman Sachs to avoid conflicts of interest. This includes the acceleration and immediate payout of vested equity awards, long-term incentive plan (LTIP) awards, and performance-based stock units (PSUs), totaling a substantial cash payment. The filing also outlines his 2016 year-end compensation, which saw a slight decrease from the prior year, with a majority paid in restricted stock units (RSUs).

Key Highlights

  • 1Gary D. Cohn, former President and COO, is departing Goldman Sachs to become Director of the National Economic Council.
  • 2Federal ethics laws necessitated Mr. Cohn divesting all financial interests in Goldman Sachs.
  • 3Vested RSUs, LTIP awards, and PSUs were accelerated and settled immediately upon his government appointment.
  • 4Mr. Cohn received approximately $47 million for LTIP Awards and $18 million for PSUs.
  • 5Total 2016 compensation for Mr. Cohn was $20 million, a 5% decrease from $21 million in 2015.
  • 670% of Mr. Cohn's 2016 year-end variable compensation was paid in restricted stock units (RSUs).
  • 7Mr. Cohn also divested participation in deferred compensation plans and certain private equity/hedge fund investments managed by the firm.

Frequently Asked Questions

Gary D. Cohn is leaving his positions as President and Chief Operating Officer of Goldman Sachs to accept a role as Director of the National Economic Council (NEC) in the U.S. government. This transition requires him to sever his financial ties with the firm to comply with federal ethics laws.

To comply with ethics regulations, Mr. Cohn had to divest all his financial interests in Goldman Sachs. This resulted in the immediate settlement of his vested equity awards (RSUs), LTIP awards, and PSUs, which he would have otherwise received over future periods. This accelerated payout amounted to significant cash payments.

Gary D. Cohn's total compensation for 2016 was $20 million, which was approximately a 5% decrease compared to his $21 million compensation in 2015. This included $18.15 million in year-end variable compensation and $1.85 million in base salary.

Consistent with the firm's practice, a significant portion of Mr. Cohn's 2016 year-end variable compensation was paid in equity. Specifically, 70% of his $18.15 million variable compensation was delivered as restricted stock units (RSUs), with the remainder paid in cash.