Source: Wall Street News
Goldman Sachs chief executive David Solomon is getting “creative” and breaking the rules to increase his income.
The Wall Street Journal reported that Goldman’s chief executive and a group of deputies are taking profits from the firm’s private investment funds. That could earn these executives hundreds of millions of dollars in additional income over the next few years, several times their annual salary.
But Su Dewei’s perks could anger company shareholders and Goldman’s fund managers, as the money will flow out of their pockets.
A major player in Wall Street’s private investment space, Goldman Sachs has $426 billion of its own and client funds used in corporate acquisitions, investing in loans, real estate and equity in other investment funds.
Traditionally, the profits of relevant private investment funds are shared by the fund managers who trade, and the total profit distribution ratio reaches 50%. However, under Su Dewei’s new distribution mechanism, the traditional 50% profit distribution ratio of fund managers will be compressed to 35%; the other 10% will be distributed by about 400 partners of Goldman Sachs; the last 5% will go to Su Dewei and his closest deputy. (less than 12) personal pockets.
Goldman Sachs doubled Su Dewei’s compensation to $35 million in 2021, according to public information. Half of his predecessor Lloyd Blankfein’s pre-2008 peak. Affected by the Goldman Sachs Malaysia 1MDB scandal, Su Dewei’s income in 2020 was US$17.5 million, a decrease of US$10 million from the previous year.
Overall, Su Dewei’s salary is much lower than that of his Wall Street private equity peers. Public information shows that Joseph Bae, co-CEO of a Wall Street private equity investment firm, will receive a staggering $560 million in salary in 2021.
Editor/Corrine
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