Goldman Sachs has said that the annual pay of chief executive officer David Solomon for 2020 will fell by around 36 percent because of a penalty deduction. The deduction will bring his salary down to USD 17.5 million for 2020. This will be down by USD 10 million when compared to what it received a year ago. According to a filing at US Securities and Exchange, the deduction is part of punishment over the bank’s role in the 1MDB scandal. The cut came after the bank agreed to pay USD 3 billion to settle probes after pleading guilty to charges. The bank was accused of conspiring to violate anti-bribery laws of the United States in the 1MDB scandal.
The American multinational investment bank had announced that top executives will face a pay cut in light of finding in the massive 1MDB scandal. The bank said that top executives include receiving pay cuts include CFO Stephen Scherr and COO John Waldron. They received a pay cut of USD 7 million each. According to the bank, the pay cuts are the effort to claw back USD 174 million from the current as well as former executives as parts of penalties. The scandal involved several authorities including the US Department of Justice. It relates to sales of bonds the bank arranged and underwrote for 1Malaysia Development Berhad.
The scandal was under investigation since 2015 and one of the biggest stains on the reputation of the multinational bank. The scandal was exposed at a time when Goldman Sachs was already dealing with its image problem during the 2008-09 financial crisis. During that period, the bank was facing criminal allegations of bad asset sales. The bank was accused of overlooking the fraud and bribery by prosecutors. Top executives of the bank were accused of overlooking it for hundreds of millions of dollars in fees. 1MDB advisor Jho Low is considered to be the mastermind of the fraud.