Topline
After agreeing to pay $2.8 billion in settlement money to global regulators over a Malaysian corruption scandal, Goldman Sachs is planning to recoup a collective $174 million from current and former executives, the Wall Street Journal first reported Thursday.
Goldman Sachs chairman and CEO Lloyd Blankfein speaks at the inaugural Goldman Sachs 10,000 Women/US … [+]
AFP via Getty Images
Key Facts
According to the firm’s Board of Directors, Goldman is seeking to forfeit $76 million from three former employees implicated in the scheme.
Goldman will also seek to recoup another $67 million that was previously paid out to five former executives—including former CEO Lloyd Blankfein—as part of a long-term compensation plan.
Finally, Goldman will cut another $31 million from the collective compensation of four current executives, including CEO David Solomon.
Key Background
The settlement is related to Goldman Sachs’ role in raising $6.5 billion for a state-run Malaysian investment fund known as 1MDB. A large portion of that money—originally intended to promote economic development in Malaysia—was allegedly stolen by the fund’s manager with the help of two Goldman employees and used to buy real estate and luxury goods including a private jet, artwork by Pablo Picasso and Claude Monet, and jewelry.
Crucial Quote
In a statement Thursday, Goldman’s board described the 1MDB scandal as “an institutional failure, inconsistent with the high expectations it has for the firm.”
Tangent
Goldman reported blockbuster earnings in the third quarter—pulling in $3.5 billion in profits as revenue surged 30% over the previous year—despite the ongoing economic impact of the coronavirus pandemic. Those positive results were in part due to a 71% surge in the firm’s asset management business.
Further Reading
Goldman Sachs to Recoup, Cut Executives’ Pay After Costly 1MDB Fines (Wall Street Journal)
Report: Goldman Sachs Agrees To Pay U.S. Government $2.8 Billion To Settle 1MDB Charges (Forbes)
Source: Forbes – Money
