Goldman Sachs should split CEO and chairman roles, proxy adviser ISS says

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Goldman Sachs CEO David Solomon speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, U.S., December 6, 2023. 

Evelyn Hockstein | Reuters

Goldman Sachs should separate the CEO and chairman roles currently held by David Solomon, top proxy adviser Institutional Shareholder Services (ISS) recommended on Wednesday.

“Shareholders would benefit from more independent oversight,” ISS wrote in a report sent by a representative, ahead of the bank’s annual shareholder meeting on April 24.

“Solomon’s foray into the consumer realm has been met with missteps and steep losses, which seem to have trickled into further human capital issues,” it added.

The Wall Street giant is scaling down its consumer business, which was championed by Solomon, after the operations lost billions of dollars.

Several high-profile executives have also departed Goldman, including Stephanie Cohen, the former head of its consumer and fintech unit, Jim Esposito, co-head of global banking and markets this year, and Julian Salisbury, an asset management executive in July last year.

ISS also recommended votes in favor of all of the bank’s director nominees and said “cautionary support” was warranted for its executive pay, although the bank’s compensation program relied too much on discretion.

The independence of banks’ leadership has been a hot issue since the 2008 global financial crisis. Solomon has served as CEO since 2018 and became chairman the following year.

A shareholder resolution calling for the roles of chair and CEO to be separated was filed by the conservative-leaning National Legal and Policy Center. It filed a similar measure last year that won support from just 16% of votes cast.

Goldman’s size and complexity makes it difficult for any one person to run both the company and the board, ISS said.

A Goldman spokesperson cited the bank’s recommendation to vote against the independent chair proposal as laid out in its proxy statement.

The bank appointed David Viniar, who served as its finance chief from 1999 to 2013, as its next independent lead director. He will succeed Adebayo Ogunlesi, who will step down at the annual meeting.

While the lead director duties are generally considered robust and Viniar is considered independent under ISS standards, “some may question the decision to elevate a former Goldman executive to the role at this time,” it wrote.

Viniar has served on Goldman’s board since January 2013.


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