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(Bloomberg) -- Goldman Sachs Group Inc. handed its top two executives retention awards valued at $80 million each and launched a program to give its leaders a slice of carried interest earned on private equity funds as it tries to compete on pay with top alternative-asset managers.
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The retention awards are the second in just over three years given to Chief Executive Officer David Solomon and President John Waldron, who is also the chief operating officer. They “reflect the Board’s desire to retain the current CEO and COO as a senior leadership team,” according to a filing Friday.
The retention stock bonuses vest in January 2030, meaning Solomon, who has held the top job for more than six years, and Waldron will need to stay put at the firm for another five years to see the money.
Goldman also gave Solomon a $39 million pay package for 2024, a year in which the bank’s profits surged. The award, disclosed in a filing on Friday, is a 26% increase on Solomon’s package for the previous year of $31 million.
Goldman Sachs has aimed to compete more directly with private equity firms in attracting funds into its alternative-assets unit, and has seen leaders of those buyout rivals — several of whom are Goldman alumni — receive long-term awards of a scale rarely seen in the banking sector.
The board “considered the unique competitive threats for talent that Goldman Sachs faces, including from alternative management firms and others beyond the traditional banking sector,” the firm said in the filing. “As a top 5 alternative asset manager, Goldman Sachs is especially well positioned among its banking peers to be able to provide senior leaders with the opportunity to earn carried interest.”
Solomon received an earlier retention package in late 2021 as the firm cited a “war for talent.” Those awards, which at current performance levels would be worth at least $50 million, required the stock to hit certain benchmarks and outperform rivals to unlock the full award. The retention awards announced Friday have no such performance metrics, requiring only that the two executives stay.
Other executives set to receive larger incentives thanks to the so-called Carried Interest Program include Chief Financial Officer Denis Coleman and Chief Legal Officer Kathryn Ruemmler, as well as other executives who weren’t named in the filing.