The Goldman Sachs Group, Inc. (GS, Financial) has announced significant developments in its executive compensation strategy, as detailed in a recent Form 8-K filing. The company's Board of Directors, following recommendations from the Compensation Committee, has approved retention grants and a new Long Term Executive Carried Interest Incentive Program aimed at aligning senior leadership with long-term shareholder value.
On January 16, 2025, Goldman Sachs granted 130,508 restricted stock units (RSUs) to both Chairman and CEO David Solomon and President and COO John Waldron. These RSUs, valued at $80 million each, are designed to retain the current leadership team and ensure stability and continuity over the next five years. The RSUs are subject to a five-year cliff vesting period, with vesting scheduled for January 2030, contingent upon continuous service. This initiative underscores the Board's commitment to sustaining the firm's strategic momentum and maintaining a robust succession plan.
In addition to the retention grants, Goldman Sachs has introduced a Long Term Executive Carried Interest Incentive Program. This program, approved on January 14, 2025, allocates carried interest points to key executives, including Mr. Solomon, Mr. Waldron, CFO Denis Coleman, and Chief Legal Officer Kathryn Ruemmler. The program is part of the 2024 annual compensation and aims to tie a portion of executive compensation to the performance of the firm's third-party alternatives business, a key growth strategy for Goldman Sachs.
The Carried Interest Program is designed to enhance Goldman Sachs' ability to attract and retain top talent by offering competitive compensation aligned with long-term shareholder interests. It reflects the firm's strategy to grow its third-party alternatives business and increase durable, fee-based revenues. The program also addresses competitive threats for talent from alternative management firms and other sectors beyond traditional banking.
Furthermore, the Board has set the 2024 total annual compensation for CEO David Solomon at $39 million, up from $31 million in 2023. This decision was guided by the firm's Assessment Framework, which considers financial performance metrics and non-financial factors such as strategic priorities, risk management, and people strategy.
For the fiscal year ending December 31, 2024, Goldman Sachs reported net revenues of $53.51 billion, net earnings of $14.28 billion, diluted earnings per share of $40.54, and a return on equity of 12.7%.
These strategic compensation initiatives highlight Goldman Sachs' commitment to aligning executive incentives with long-term shareholder value and maintaining its competitive edge in the financial industry.
Should you invest in The Goldman Sachs Group Inc (GS, Financial) right now? Before you do it, it’s important to understand the business profitability and stock valuations, and find out what the warning signs are about. See the in-depth The Goldman Sachs Group Inc (GS) stock research here.
