Goldman Sachs CEO David M. Solomon Makes a Mint Despite Controversies
Despite multiple controversies under his belt, David M. Solomon relishes in his high-paying role as the Goldman Sachs CEO.
April 13 2021, Published 2:37 p.m. ET
In 2018, David M. Solomon enthusiastically filled the CEO position at Goldman Sachs. What likely attracted him most was a multi-million dollar annual salary. After a salary raise—and a subsequent drawback of benefits—his net worth hasn't suffered much damage in the wake of the economic crisis.
As junior Goldman Sachs employees complained about "inhumane" working conditions spawning from 105-hour workweeks, Solomon noted his commitment to do better. However, his own salary and working conditions make space for leisure time and even a side hustle as a DJ.
David M. Solomon's salary increased during the COVID-19 pandemic.
In late March 2020, about a month and a half after the U.S. issued a public health emergency amid the COVID-19 pandemic, Goldman Sachs announced that Solomon would receive a 20 percent pay increase on top of his already multi-million dollar salary. The raise put his annual salary at $27.5 million in cash and corporate equity.
The announcement came just weeks prior to a tragic month for unemployment metrics. In April 2020, 14.7 percent of the U.S. workforce was unemployed. Unemployment benefits were slow to roll out as states dealt with burgeoning demand.
Goldman Sachs didn't have much to worry about in terms of a faltering economy. The company had been bailed out before and saw no reason why it wouldn't happen again, especially considering that former U.S. Secretary of the Treasury Steven Mnuchin (and his father) were once Goldman partners who could potentially retain a stake in the company.
Goldman cut Solomon's pay later in 2020.
Goldman Sachs played a major role in the ongoing 1MDB scandal based in Malaysia. Bank employees played a part in raising $6.5 billion for the state fund called 1Malaysia Development Berhad (1MDB). Billions were looted from the fund from 2009–2013, right at the time Goldman Sachs employees were involved.
As a result, the bank cut off three former employees (Timothy Leissner, Roger Ng, and Andrea Vella) from receiving $76 million in benefits after they left the company. Five former executives received $67 million in compensation in 2011. They have been asked to return the money based on their role in the scandal.
As a final warning to the Goldman corporation, Solomon (who didn't start as the CEO until 2018, but started as a partner in 1999) and three other members of the current executive branch saw a collective pay cut of $31 million in 2020. Solomon's pay cut was ostensibly reversed.
David M. Solomon's net worth speaks volumes.
Solomon is seated at the apex of all of Goldman Sachs's controversy, but it isn't all bad. He retains a valuable net worth in cash, equity, and assets. In 2018, when Solomon became the CEO, he held an estimated 224,030 shares or 0.059 percent of a company that then retained a $61.43 billion market capitalization. Since then, the market cap has swelled to $112.54 billion, which makes Solomon's stake worth $663 million.
Even with salary swings, Solomon receives millions (if not tens of millions) of dollars per year for his role as Goldman Sachs CEO, which only adds to his net worth. Also, he's a fan of cryptocurrency like Bitcoin (an asset that's rapidly growing in value) beyond its corporate benefits.