A majority of shareholders have approved the controversial pay package Goldman Sachs (GS) CEO David Solomon.
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The approval comes despite pushback from several prominent investor advisory firms that claimed bonuses awarded to Solomon and John Waldron, the firm’s president, are excessive. The Wall Street investment bank said at its annual meeting held in Dallas, Texas that 66% of GS shareholders voted to approve the executive compensation package.
While the pay package has been approved, support was down from the previous year when 86% of Goldman Sachs’ shareholders voted to approve the firm’s executive compensation. Controversy erupted over a pair of $80 million retention bonuses paid to David Solomon and John Waldron, who is widely considered a contender to succeed Solomon in the CEO role at Goldman Sachs.
Proxy Battle
Two influential shareholder advisory groups urged shareholders to vote against the bonuses for Solomon and Waldron. Institutional Shareholder Services, or ISS, and Glass Lewis each published reports critical of the bonuses and labeling them as extreme and not in the interest of the investment bank or its shareholders.
The $80 million bonuses are being paid in the form of restricted stock units, a form of stock compensation that employees can earn over time. The bonuses are on top of Solomon and Waldron’s annual pay, which the firm said was $39 million and $38 million, respectively, in 2024.
The outcome of the vote on management pay was being closely watched on Wall Street as it sends a signal to firms on whether shareholders approve or disapprove of their compensation packages. Goldman Sachs has said that it must pay big bonuses as competition for talent on Wall Street remains “fierce.”
GS stock has risen more than 125% since Solomon took the bank’s helm in October 2018.
Is GS Stock a Buy?
Goldman Sachs stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on seven Buy and seven Hold recommendations assigned in the last three months. The average GS price target of $607.50 implies 13.26% upside from current levels.
