What's good for the gander is good for the geese, right?
It seems that way at Goldman Sachs. No sooner do we write about how Goldman Sachs is looking to implement additional paid leave for its rank-and-file employees in order to keep morale up than it was revealed that the company's bosses are also looking at ways of improving their own
yacht collection quality of life.
In fact, CEO David Solomon and the top brass at the bank are reportedly "searching for ways to juice their own eight-digit pay packages," Bloomberg reported this week.
Solomon's total stake in the company, including unvested stock, is worth about $180 million already the report says. He made $27.5 million his first full year as CEO and the same the next year, in 2020. Solomon also was given a $50 million bonus plan to be split with another employee in October of this year. That off-cycle bonus came as a result of Goldman's skyrocketing stock price, which is up about 80% since Solomon took over as CEO.
Pat Scanlan, a spokesman for the bank, told Bloomberg: "We have offered co-investment opportunities for our senior executives that align interests with investors. That the board of directors would explore additional opportunities is hardly surprising."
One way that Solomon is pushing to boost pay is to expand the allocation of founders' shares in SPAC deals that the bank partakes in. These requests have reportedly "irritated members of the SPAC team", as it pins them against Solomon for a share of the projects that they have worked on.
Teams at the bank are reportedly "scrambling to figure out how to structure and disclose the SPAC investment for the NEOs while avoiding the appearance of boosting pay."
The optics of bonuses when you're already making tens of millions of dollars per year need to be carefully dealt with. While banks want to raise pay commensurate with other banks in order to retain talent, they have to walk a thin line with public perception. Bloomberg says that the key is to "give the board as much elbow room as possible to grant him more, without making it look like an outsized raise".
For example, when Morgan Stanley CEO James Gorman surprised the market in 2020 by lowering his pay by about 7% due to the pandemic, it caused Goldman to delay its own decision on executive compensation for months.
Top brass at Goldman has also reportedly looked at different ways to increase their share of profits from internal investment vehicles, including whether or not private funds operated by the firm’s merchant bank could pay larger bonuses for senior managers.
Recall, days ago we wrote how Goldman was also seeking to offer new incentives to its "burnt out" employees.
The investment bank is going to now be offering "paid leave for pregnancy loss" and is "expanding the amount of time employees can take for bereavement leave," the report says.
Goldman will also be offering unpaid sabbatical for its long time employees and removing a one year waiting period before matching employee 401(k) contributions.
Goldman's head of human resources, Bentley de Beyer, told the WSJ: "We wanted to offer a compelling value proposition to current and prospective employees, and wanted to make sure we're leading, not just competing."