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1MDB scandal could result in pay cut for Goldman Sachs’ executives

Jaclyn Jaeger | February 21, 2019

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...

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