Influential proxy adviser Glass Lewis has really helpful that Goldman Sachs traders vote towards particular bonuses awarded to its prime two executives on the firm’s upcoming shareholder assembly, amid rising backlash over hefty remuneration in company America.
The pushback is an indication of frustration over pay packages on the largest banks. Wall Road’s main corporations elevated pay by almost 15 per cent in 2021, as dealmaking and buying and selling boomed and as a way to hold their prime bankers glad amid a surge in world wage inflation.
Company America is going through a backlash over massive bonuses awarded in 2021, which is on observe to be a file excessive yr for government pay. Glass Lewis on Friday really helpful shareholders at Coca-Cola vote towards the corporate’s 2021 government pay. Institutional Shareholder Companies, the biggest proxy adviser, has really helpful shareholders at Honeywell Worldwide vote towards bonuses.
Glass Lewis is taking concern with the choice by Goldman in October to grant performance-based inventory price $30mn to chief government David Solomon and $20mn in inventory for group president John Waldron. The awards could be paid out in October 2026.
In January, Goldman expanded these awards to incorporate different members of its administration workforce together with Philip Berlinski, the financial institution’s world treasurer, and Kathryn Ruemmler, chief authorized officer.
The compensation plans shall be put to shareholders in an advisory vote at Goldman’s annual common assembly on April 28. Ultimately yr’s assembly, 94 per cent of the financial institution’s shareholders supported the corporate’s pay plan.
“We’re involved about particular, one-off grants to the CEO and COO,” Glass Lewis wrote in a advice report back to Goldman shareholders seen by the Monetary Instances. “We consider that long-term incentives ought to encourage executives to attain regular and sustainable progress fairly than what might quantity to comparatively transient spikes in efficiency.”
Goldman is awarding the grants based mostly on the typical efficiency of the lender’s share worth throughout 30-day intervals over the subsequent 5 years.
The suggestions of proxy advisers equivalent to Glass Lewis and ISS maintain sway as they’re usually adopted by passive funding funds. An ISS report on Goldman was not instantly accessible on Friday. Shareholder votes on pay are non-binding, however can spotlight investor discontent with firm boards and executives.
Coca-Cola declined to remark, whereas Goldman and Honeywell didn’t instantly reply to requests for remark. The Glass Lewis advice to Goldman shareholders was reported earlier on Friday by Bloomberg.
In its proxy supplies for the shareholder vote, Goldman argued that the bonus plans assist “drive long-term shareholder worth creation” and likewise “guarantee management continuity over the subsequent five-plus years”.
General for 2021, not together with these particular grants, Solomon, Waldron, Berlinski, Ruemmler and Stephen Scherr, Goldman’s chief monetary officer who left the financial institution on the finish of final yr, collectively earned $125mn.
Rival JPMorgan Chase, which has confronted investor blowback over its spending plans, final yr granted its chief government Jamie Dimon a particular award of share choices projected to be price round $49mn.
