1MDB scandal could hit top executives' pay: Goldman

Goldman Sachs has consistently denied wrongdoing.
Goldman Sachs has consistently denied wrongdoing.PHOTO: REUTERS

WASHINGTON • The Goldman Sachs board has said it is withholding a bonus worth at least US$7 million (S$9.5 million) from former chief executive Lloyd Blankfein until investigations into the bank's involvement in the 1Malaysia Development Berhad (1MDB) scandal are resolved.

The bank also introduced a new forfeiture provision in its annual compensation plans for both its most senior executives, current chief executive David Solomon and his predecessor, Mr Blankfein, relating to the ongoing 1MDB proceedings.

The move, announced last Friday, underscored the perils the 1MDB scandal still hold for Goldman, which is being investigated by Malaysian authorities and the United States Department of Justice for its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1MDB.

The Justice Department estimated that a total of US$4.5 billion was misappropriated by high-level 1MDB fund officials and their associates between 2009 and 2014, including some of the funds that Goldman helped raise.

The Wall Street bank has consistently denied any wrongdoing.

Goldman said in a regulatory filing on Friday that its board can reduce pay packages of top executives depending on the outcome of ongoing investigations into the fraud at 1MDB .

The bank said it paid Mr Solomon US$23 million in total compensation last year, a 9.5 per cent jump from the previous year.

 

Mr Blankfein received US$20.5 million in annual compensation last year, down US$3.5 million from 2017.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on February 03, 2019, with the headline '1MDB scandal could hit top executives' pay: Goldman'. Print Edition | Subscribe