Goldman Sachs Group Inc.’s $80 million retention bonuses for the agency’s prime two leaders have drawn one other distinguished critic, with Institutional Shareholder Providers urging buyers to reject the rewards at an annual assembly.
The emblem for Goldman Sachs is seen.(Reuters)
The incentives for Chief Government Officer David Solomon and President John Waldron “lack rigorous, pre-set performance criteria, which is particularly concerning for off-cycle awards with such large values,” the proxy adviser wrote in observe to shoppers Monday. It accused the board of “poor practice” for including new incentives earlier than a previous program is completed.
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In a separate advice late final week, Glass Lewis described the newest bonuses as “excessive.”
Goldman Sachs’s board has urged shareholders to endorse the incentives in an advisory vote at its April 23 assembly, with the agency citing “fierce” competitors for expertise. The package deal of restricted inventory would reward the pair for sticking round 5 extra years.
“The board took action to retain our current leadership team, to sustain our firm’s momentum and maintain a strong succession plan,” the corporate stated in a press release after Glass Lewis’ earlier advice.
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The financial institution’s inventory has superior greater than 140% since Solomon’s tenure as CEO started in 2018, outperforming the broader S&P 500 Index. The worth of the brand new incentives are based mostly on the inventory’s worth in January and will improve if it goes up additional.
But the scale and construction of the package deal elevate important considerations, ISS stated.
“The board’s rationale for these grants in the context of strong company performance and competitive climate may be compelling for some shareholders,” the adviser acknowledged. However the recent incentives have been added whereas one other reward program from 2021 continues to be pending, it stated.
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Administrators ought to have laid out their reasoning for doing so, ISS stated. “It is generally considered a poor practice to grant overlapping off-cycle awards.”