As Goldman Sachs Group Inc. seeks shareholder approval for $160 million in special bonuses for its top two executives, the firm is hoping investors will view it not just as a traditional investment bank, but as a rising force in private markets.
The proposed retention packages — $80 million each for CEO David Solomon and President John Waldron — aim to secure their leadership over the next five years. Goldman argues that these unusually large rewards are justified, positioning the pair as leaders of what it now considers a top-tier private markets firm.
In its January announcement, Goldman’s board cited the need to stay competitive in attracting and retaining talent, particularly as firms like Blackstone, KKR, and Apollo Global Management offer their executives potentially billion-dollar windfalls. Goldman emphasized its growing presence in alternative asset management, stating it is now one of the top five players in the space.
Shareholders are set to vote on the proposal during the company’s annual meeting in Dallas on Wednesday. Although the vote is non-binding, it’s stirring notable controversy. Proxy advisory firms have urged investors to reject the packages, criticizing them as excessive and poorly structured. One concern: unlike performance-based bonuses common in the post-crisis era, these awards primarily reward longevity, not results.
Wells Fargo analyst Mike Mayo warned the move might alienate the broader workforce, while others question whether Goldman’s evolving identity justifies a shift in how it compensates leadership.
Goldman’s pitch hinges on its transformation. Once known solely for its dominance in investment banking and trading, the firm is now aggressively building a footprint in private markets. Its asset management division now oversees $500 billion in private assets — a significant chunk of the $3.2 trillion it manages overall.
Despite this, the market remains cautious. Goldman’s stock trades at roughly 12 times earnings, on par with rivals like JPMorgan and Morgan Stanley. That’s far lower than KKR’s 29x and Blackstone’s 37x valuations, driven in part by the latter firms’ leaner structures and fee-based income models.
Analysts say this valuation gap reflects skepticism about how central private markets can become to Goldman’s profits. “Matching the valuations of private equity giants may be unrealistic,” said Autonomous Research analyst Christian Bolu. “Private markets are unlikely to be the firm’s primary earnings engine anytime soon.”
Pay disparities underscore the contrast. JPMorgan CEO Jamie Dimon earned $39 million in 2024, similar to Solomon. At KKR, co-CEOs pulled in $73 million and $64 million each, thanks to carried interest and equity-based compensation. Blackstone’s Steve Schwarzman topped them all, earning nearly $84 million last year — and over $900 million in dividends as the firm’s largest shareholder.
In a bid to align itself more with the private equity model, Goldman has begun introducing carried-interest-style incentives. Top executives now receive a share of profits from the firm’s private investment funds — a move that could reshape how compensation is viewed within the Wall Street giant.
Solomon, for his part, has championed Goldman’s shift toward steady, fee-driven income. On a recent earnings call, he described private assets as a long-term growth area, driven by increasing demand from individuals and institutions alike.
“The trend toward private asset allocation is secular and enduring,” Solomon said. “That will drive meaningful growth over the next decade and beyond.”
Still, Goldman’s timing is tricky. Global uncertainty — spurred in part by former President Trump’s trade policies — has rattled markets and complicated deal-making for private equity firms. Yet Goldman’s focus on asset-light sectors and strategic exits post-pandemic has helped insulate its portfolio.
Even so, growth in asset and wealth management fees is projected to be the slowest in five years, according to analyst estimates.
Citizens Financial analyst Devin Ryan believes the firm is still in early innings. He projects Goldman’s asset-management unit could generate a third of the firm’s total earnings within two years — up from about 25% today — and sees private assets potentially doubling to $1 trillion within five years.
Pressed recently on future growth targets, Goldman Sachs Asset Management chief Marc Nachmann declined to offer specifics but hinted at strong expectations.
“We expect alternatives to grow faster than traditional assets,” Nachmann said. “And we’re working hard to grow both.”
As shareholders prepare to cast their votes, the outcome may hinge on whether they’re convinced Goldman’s transformation into an “alts” powerhouse is real — and whether its top brass deserve to be paid like it.
