Goldman Sachs’ Chief Executive, Mr. David Solomon, will get a $10m (£7.3m) pay cut for the bank’s involvement in the 1MDB corruption scandal, according to the British Broadcasting Corporation (BBC). 1MDB was an investment fund set up by the Malaysian government that lost billions due to fraudulent activity. The global web of fraud and corruption led to a 12-year jail term for Malaysia’s ex-prime minister Najib Razak which he is appealing. Goldman Sachs called its involvement in the scandal an “institutional failure”.
Goldman Sachs helped raise $6.5bn for 1MDB by selling bonds to investors, the proceeds of which were largely stolen. Prosecutors alleged that senior Goldman executives ignored warning signs of fraud in their dealings with 1MDB and Jho Low, an adviser to the fund.
Two Goldman bankers have been criminally charged in the scandal. Mr Solomon’s pay would have been $10m higher but for the actions its board of directors took in response to the 1MDB saga, Goldman Sachs said on Tuesday. While disclosing his salary had dropped to $17.5m for 2020, the bank stressed that Mr Solomon was unaware of the corruption.
He was not “involved in or aware of the firm’s participation in any illicit activity at the time… the board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm”.