U.S. investment bank Goldman Sachs cut chief executive David Solomon's yearly pay by $10 million after a penalty deduction that resulted from the bank's involvement in a corruption scandal known as 1MDB, reports said Wednesday.
Based on a U.S. Securities and Exchange document on Tuesday, Solomon's payout was trimmed down to $17.5 million for 2020, down from the $27.5 million he was paid from the previous year.
The salary package dropped after Solomon was mandated to return around $10 million to make amends for the bank's criminal liability in the Malaysian investment fund bribery scandal, Goldman Sachs said in a Tuesday filing.
The scandal was in connection to the sale of bonds that Goldman Sachs arranged and underwrote for 1MDB, from which the U.S. Department of Justice claims $4.5 billion was stolen. 1MDB, or 1 Malaysia Development Board, was a sovereign-backed Malaysian fund setup to invest in long-term commercial and industrial development projects.
U.S. Justice officials alleged that Jho Low, a Malaysian financier, instead masterminded a plot to funnel the money from the fund to the bank accounts of former Malaysian prime minister Najib Razak.
Goldman previously said it would cut Solomon's salary, along with that of Chief Operating Officer John Waldron and Chief Financial Officer Stephen Scherr in light of the outcome of the inquiry into Goldman's links in the scandal.
While Solomon was not accused of misconduct, the bank's board said in October it would be "appropriate" to withhold $31 million in payouts for the CEO and three of his top deputies after Goldman entered into more than $5 billion in settlements to resolve criminal probes.
"While none of Messrs. Solomon, Waldron or Scherr was involved in or had knowledge of the bank's involvement in any illicit activity... the board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm," CNN Business quoted the filing as saying.
Goldman is currently initiating belt-tightening measures to reduce costs and realize over a billion dollars in yearly savings.
The bank had also suspended its own pandemic pledge to halt job terminations, and implemented two separate rounds of employment cuts last year to manage costs.
