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Goldman Sachs cuts US$174 million of pay for current and former executives, taking them to task for bank’s role in 1MDB fraud
- The bank will cut the compensation for chief executive David Solomon and his team of senior executives
- Financial awards allocated to former chief executive Lloyd Blankfein and others will also be slashed, the bank say
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Goldman Sachs will cut or claw back US$174 million of pay from a dozen of its most senior current and former executives, holding them personally accountable for the Wall Street bank’s role in the 1MDB fraud, after the bank’s Asia unit was slapped with a record fine by Hong Kong’s regulator.
The bank will cut the compensation for chief executive David Solomon and his team of senior executives, and claw back the financial awards allocated to the former CEO Lloyd Blankfein, according to a statement by Goldman Sachs.
“Today, our board of directors announced action with respect to past and current senior management compensation, among other areas of focus,” Solomon said in the statement. “This action is entirely appropriate under the circumstances. The board’s announcement is an important reminder that we are all responsible for each other’s actions, including our collective failures.”
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The latest action would recoup some money for the bank, which has paid more than US$5 billion of fines and financial penalties in Hong Kong, Singapore, Malaysia, Britain and the United States for its role in helping 1Malaysia Development Berhad (1MDB) raise US$6.5 billion in three bond offerings in 2012 and 2013.
Much of that money raised, initially meant for rural and industrial development in Malaysia, was stolen by people associated with the Southeast Asian nation’s former prime minister Najib Razak, funnelled to all kinds of luxury purchases including Manhattan apartments, Monet art, a superyacht and even a Hollywood movie.
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