Goldman Sachs boss gets $10m pay cut for 1MDB scandal

Goldman Sachs boss gets $10m pay cut for 1MDB scandal
Goldman Sachs' chief executive David Solomon. Source: Getty Images
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The Daily US Times: The chief executive of Goldman Sachs David Solomon will get a $10m pay cut for the bank’s involvement in the 1MDB corruption scandal.

1MDB was an investment fund set up by the Malaysian government that lost billions due to fraudulent activity.

The global web of corruption and fraud led to a 12-year jail term for Malaysia’s ex-prime minister Najib Razak which he is appealing.

Goldman Sachs called its involvement in the scandal an “institutional failure”.

The bank helped raise $6.5bn for 1MDB by selling bonds to investors, the proceeds of which were largely stolen.

Prosecutors alleged that senior executives of the bank ignored warning signs of fraud in their dealings with 1MDB and Jho Low, an adviser to the fund.

Two bankers of Goldman have been criminally charged in the scandal.

Goldman Sachs said on Tuesday that Mr Solomon’s pay would have been $10m higher but for the actions its board of directors took in response to the 1MDB saga.

While disclosing his salary dropped to $17.5m for 2020, Goldman stressed that Mr Solomon he was unaware of the corruption.

He was not “involved in or aware of the firm’s participation in any illicit activity at the time…the board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm”.

David Solomon’s package consists of $2m in cash base pay, a $4.65m cash bonus, and $10.85m in stock-based compensation.

In October last year, Goldman agreed to pay nearly $3bn to government officials in four countries to end an investigation into work it performed for 1MDB. Goldman collected $600m for arranging the bond sales in 2012 and 2013.

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