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Tuesday
Feb052019

Goldman Sachs targets executive pay over 1MBD scandal

In a filing with the SEC, Goldman Sachs said 2018 equity-based pay awards would be subject to clawbacks depending on the results of the 1MDB investigations. 

According to the filing, Chairman and CEO David Solomon received $23 million in total 2018 annual compensation. Former Chairman and CEO, Lloyd Blankfein, received $20.5 million.

The awards paid to both Solomon and Blankfein could be subject to clawbacks.

Blankfein transitioned out of the CEO role at the end of September 2018 and remained Chairman of the Board through the end of the year.

From Goldman's February 1, 2019 Form 8-K (courtesy of FCPA Tracker):

In light of the ongoing governmental and regulatory investigations relating to 1Malaysia Development Berhad (“1MDB”), the Board also approved a new forfeiture provision that was included in the terms and conditions of the 2018 year-end equity-based awards granted to each of the employees serving as the firm’s Senior Executives as of December 31, 2018. This provision will provide the Committee with the flexibility to reduce the size of the award prior to payment and/or forfeit the underlying transfer-restricted shares (which transfer restrictions release approximately five years after the grant date) if it is later determined that the results of the 1MDB proceedings would have impacted the Committee’s 2018 year-end compensation decisions for any of these individuals.

Last month, actor Leonardo DiCaprio appeared secretly before a Washington, D.C. grand jury to testify as part of the DOJ's investigation into the looting of Malaysian sovereign wealth fund 1MDB.

In November, Tim Leissner, the former Goldman Sachs chairman in Southeast Asia, pleaded guilty to FCPA and money laundering conspiracies for a plot to loot the Malaysian sovereign wealth fund formally known as 1Malaysia Development Berhad.

Leissner forfeited $43.7 million as part of his plea deal. He's waiting to be sentenced.

Goldman Sachs raised around $6.5 billion for the Malaysian sovereign wealth fund. 

The DOJ said Malaysian officials looted around $4.5 billion was looted from 1MBD.

In a November SEC filing, Goldman Sachs said the firm is cooperating with the "DOJ and all other governmental and regulatory investigations relating to 1MDB."

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Harry Cassin is the publisher and editor of the FCPA Blog.