8-KOther Events

GOLDMAN SACHS GROUP INC 8-K Report, Corporate Update (Feb 16, 2024)

Filed February 16, 2024For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. (GS) has filed an 8-K report to disclose the 2023 total annual compensation for its Chairman and CEO, David Solomon. The Board of Directors, following the Compensation Committee's recommendation, has set Mr. Solomon's 2023 compensation at $31 million, an increase from $25 million in 2022. This total includes a base salary of $2 million and $29 million in variable compensation, with a significant portion, 70% ($20.3 million), delivered as performance-based restricted stock units (PSUs). This structure emphasizes long-term alignment with firm performance metrics. The Compensation Committee's decision was guided by an Assessment Framework considering financial performance, strategic priorities, client orientation, risk management, and people strategy. The committee cited Mr. Solomon's leadership in clarifying and simplifying the firm's strategy, executing actions to narrow its focus, and strengthening core franchises. Despite these strategic actions negatively impacting short-term performance and overall financial results (including a reported net revenue of $46.25 billion and net earnings of $8.52 billion), the committee viewed them as critical for building a stronger platform for the future. The report also highlights that selected items and the FDIC special assessment fee reduced 2023 net earnings by $2.8 billion.

Key Highlights

  • 1David Solomon's 2023 total annual compensation set at $31 million, an increase from $25 million in 2022.
  • 270% ($20.3 million) of the variable compensation is structured as performance-based restricted stock units (PSUs), linking pay directly to ongoing performance metrics.
  • 3The Compensation Committee cited Mr. Solomon's decisive leadership in strategic clarification and simplification as a key factor in the compensation decision.
  • 4The firm's strategic actions to narrow focus and strengthen its platform were acknowledged, even though they impacted short-term performance.
  • 5Full-year 2023 financial results reported include net revenues of $46.25 billion, net earnings of $8.52 billion, and diluted EPS of $22.87.
  • 6Strategic actions and the FDIC special assessment fee reduced 2023 net earnings by $2.8 billion, impacting EPS by $8.04 and ROE by 2.6 percentage points.

Frequently Asked Questions

David Solomon's total annual compensation for 2023 was $31 million. This comprises a $2 million base salary and $29 million in variable compensation.

Seventy percent of Mr. Solomon's $29 million in annual variable compensation, amounting to $20.3 million, is in the form of performance-based restricted stock units (PSUs). The remaining portion is paid in cash.

The committee considered Mr. Solomon's leadership in clarifying and simplifying the firm's strategy, swift execution of strategic actions, progress in core franchises (Global Banking & Markets, Asset & Wealth Management), commitment to long-term shareholder value, client centricity, firm culture, and risk management. They also reviewed the firm's 2023 financial performance relative to peers and the operating environment.

The execution of strategic actions to narrow the firm's focus negatively impacted short-term performance. These actions, along with the FDIC special assessment fee, reduced 2023 net earnings by $2.8 billion, diluted EPS by $8.04, and return on equity by 2.6 percentage points, though the committee viewed these as critical for future strength.