Goldman Sachs says 1MDB scandal could hit pay for top executives Lloyd Blankfein and David Solomon
- Ex-CEO Lloyd Blankfein and current chief exec David Solomon could find their annual compensation plans forfeited
- Blankfein has also had a bonus worth at least US$7 million withheld in the fallout from the 1MDB scandal
Investment bank Goldman Sachs said on Friday it could withhold multimillion-dollar bonuses for former CEO Lloyd Blankfein and other executives as a result of the 1MDB corruption scandal.
In a statement filed on Friday with securities regulators, the company said stock awards for senior executives could be cut depending on how pending investigations into 1MDB turn out.
The case has left the storied US banking giant with a black eye. The Justice Department in November charged two former Goldman bankers for their alleged roles in misappropriating 1MDB funds, one of the largest financial frauds ever.
US prosecutors also said an unnamed “high-ranking executive” which a source later identified as Blankfein, met with the scam’s alleged mastermind Low Taek Jho in 2009, the year 1MDB was created.
Goldman helped 1MDB to issue US$6.5 billion in bonds but US and Malaysian authorities say about US$3 billion was stolen.
According to Friday’s statement, the compensation committee on Goldman’s board will have the “flexibility to reduce the size of the award... if it is later determined that the results of the 1MDB proceedings” would have affected decisions on year-end compensation.