Goldman Sachs (GS) CEO David Solomon has been awarded an $80 million stock bonus to stay at the helm of the investment bank for another five years.
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John Waldron, Goldman’s president and chief operating officer (COO), who is viewed as an eventual successor to Solomon, was also awarded an $80 million retention bonus to remain with the venerable Wall Street firm.
The decision to keep Solomon as Goldman Sachs’ CEO is a bit of a surprise given his tumultuous and controversial time leading the bank since 2018. Solomon, age 63, was widely criticized for leading Goldman Sachs through a disastrous push into consumer banking that it has since abandoned. His gruff personal style and hobby as a night club disc jockey (DJ) have also been criticized in the media.
Rising Compensation
Despite the criticisms, the fortunes of both Goldman Sachs and Solomon turned around over the last 18 months amid a booming stock market that led to strong financial results at the bank and a 70% rise in GS stock over the last year. Goldman’s share price is now up 174% since Solomon took over seven years ago.
The $80 million bonus being paid to Solomon vests in five years, said Goldman Sachs in a news release.
Solomon’s base salary for 2024 rose 26% to $39 million. Keeping both him and potential successor John Waldron around helps to alleviate any succession drama at the firm, say analysts.
Several other Wall Street banks are grappling with their own succession issues as several prominent CEOs prepare to retire, including Jamie Dimon at JPMorgan Chase (JPM) and Brian Moynihan at Bank of America (BAC).
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 12 Buy and four Hold recommendations issued in the last three months. The average GS price target of $657.87 implies 5.48% upside from current levels.
