Goldman Sachs disclosed in a quarterly filing this month with the Securities and Exchange Commission that 2018 equity-based pay awards could be subject to clawbacks depending on the results of governmental and regulatory investigations relating to 1MDB, the Malaysian government’s sovereign wealth fund.
Due to the ongoing governmental and regulatory investigations relating to 1MDB, Goldman Sachs said in a Feb. 1 quarterly filing that the board “approved a new forfeiture provision that was included in the terms and conditions of the 2018 year-end, equity-based awards granted to each of the employees serving as the firm’s senior executives as of Dec. 31, 2018.”
“This provision will provide the committee with the flexibility to reduce the size of the award prior to payment and/or forfeit the underlying transfer-restricted shares (which transfer restrictions release approximately five years after the grant date) if it is later determined that the results of the 1MDB proceedings would have impacted the committee’s 2018 year-end compensation decisions for any of these individuals,” the Form 8-K states.
According to the company’s quarterly filing, Goldman Sachs Chairman and CEO David Solomon received $23 million in total 2018 annual compensation, while former Chairman and CEO Lloyd Blankfein received $20.5 million. The awards paid to both Solomon and Blankfein could be subject to clawbacks.
In a November quarterly filing, Goldman Sachs said it received subpoenas and requests for documents and information from various governmental and regulatory bodies and self-regulatory organizations as part of investigations and reviews relating to financing transactions and other matters involving 1MDB. “Subsidiaries of the firm acted as arrangers or purchasers of approximately $6.5 billion of debt securities of 1MDB,” the quarterly filing said.
Goldman Sachs said it is “cooperating with the DOJ and all other governmental and regulatory investigations relating to 1MDB.”