The Goldman Sachs Group (GS) raised the annual compensation of its Chairman and CEO David M. Solomon to $35 million, following similar announcements made by JP Morgan Chase & Co. (JPM) and Morgan Stanley (MS).
Shares of the global investment bank closed up 1.7% at $347.01 on January 28. Its shares have lost 12.2% to date against a gain of 28.5% over the past year.
CEO Solomon Receives $35M Pay
On the recommendation of the Compensation Committee, GS finalized the 2021 annual compensation for its CEO at $35 million. The compensation consists of an annual base salary of $2 million and the remaining is variable compensation.
Out of the $33 million variable compensation, $23.1 million (70%) will be given in the form of performance-based restricted stock units and the rest in cash.
The compensation marks a 100% hike to Solomon’s 2020 annual compensation of $17.5 million, which was reduced from $27.5 million following the settlement of matters relating to 1Malaysia Development Berhad (1MDB).
2021 was an exceptional year for banks, after their bottom lines received a boost following the release of pandemic-related loan loss provisions, which are yet to be realized. For the full year fiscal 2021, GS’ earnings jumped 140% to $59.45 per share, while total net revenue grew 33% year-over-year to $59.3 billion.
Earlier, MS lifted CEO James Gorman’s annual compensation to $35 million, and JPMorgan hiked CEO Jamie Dimon’s annual salary to $34.5 million.
Consensus View
The Wall Street community has a Moderate Buy consensus rating on GS, which is one of the best bank stocks. This consensus is based on 9 Buys and 6 Holds. The average Goldman Sachs price target of $464.08 implies 33.7% upside potential to current levels.
Stock Investors
According to TipRanks’ Stock Investors tool, investor sentiment is currently Very Positive on Goldman Sachs, with 7% of portfolios tracked by TipRanks increasing their exposure to GS stock over the past 30 days.
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