Will Goldman Sachs executives forfeit millions in pay over 1MDB?

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Goldman Sachs Executives Face Potential Loss of Millions in Pay and Bonuses Due to 1MDB Scandal

Goldman Sachs is withholding bonuses and may pursue clawbacks of salaries from top executives in response to its involvement in the 1MDB scandal. This action affects both former and current senior leadership, reflecting the significant repercussions the bank faces from its role in the Malaysian state fund's financial irregularities. The bank has set aside substantial funds to address potential financial liabilities arising from legal proceedings and past investments connected to 1MDB.
Withholding of Bonuses for Past Executives

Bonuses earned in prior years are not being paid out to former CEO Lloyd Blankfein and two other unnamed senior executives. Specifically, a cash bonus owed to Blankfein under a 2011 award, which has reportedly doubled in value, is being temporarily withheld. This measure extends to similar bonuses for two other former executives, underscoring the broad impact of the scandal on past leadership compensation.
Potential Clawback of 2018 Compensation for Current Executives

The bank's board has reserved the right to reclaim a portion of the 2018 pay from current top executives, including CEO David Solomon. Solomon earned US$23 million in 2018 for his roles as CEO and chief operating officer, while Blankfein received US$20.5 million that year, a decrease from US$24 million the previous year. This provision indicates a potential financial consequence for current leadership stemming from the 1MDB affair.
Scale of the 1MDB Scandal and Goldman Sachs' Exposure

The 1MDB scandal involves allegations that US$2.7 billion of the US$6.5 billion raised by Goldman Sachs for the fund was misappropriated. Malaysia is seeking up to US$7.5 billion in compensation from the bank. Goldman Sachs has provisioned US$1.8 billion to cover anticipated losses from legal actions and its past involvement with 1MDB.
Legal and Criminal Actions Against Goldman Sachs

Beyond compensation claims, Goldman Sachs subsidiaries in Malaysia face criminal charges related to three bonds worth US$6.5 billion that the bank underwrote for 1MDB. Additionally, former Goldman Sachs bankers Tim Leissner and Roger Ng Chong Hwa, along with individuals Jho Low and Jasmine Loo Ai Swan, have been charged criminally. These actions highlight the severe legal ramifications the bank and its former employees are confronting.

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Will Goldman Sachs executives forfeit millions in pay over 1MDB?

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