Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On October 21, 2021, pursuant to a recommendation from its Compensation
Committee, the Board of Directors (the Board) of The Goldman Sachs Group, Inc.
(Goldman Sachs or the Registrant) granted 73,264 performance-based restricted
stock units (each, a PSU) to Chairman and Chief Executive Officer David M.
Solomon ($17.0 million grant date fair value(1)) and 48,843 PSUs to President
and Chief Operating Officer John E. Waldron ($11.4 million grant date fair
value(1)) (together, the Shareholder Value Creation Award).
The Shareholder Value Creation Award is a stock-based award that is subject to
both performance and time-based vesting conditions and is designed to directly
tie longer-term pay outcomes to shareholder value creation in a balanced manner
that does not encourage imprudent risk taking. In granting the Shareholder Value
Creation Award, the Board intended to address three key objectives: (1) ensure
leadership continuity over the next 5+ years in the next phase of Goldman Sachs'
growth strategy; (2) align compensation with rigorous performance thresholds
that drive long-term shareholder value creation; and (3) enhance retention in
response to the rapidly increasing war for talent in the current environment.
The Shareholder Value Creation Award is not part of Messrs. Solomon's or
Waldron's regular annual compensation and will not be awarded on a regularly
The Shareholder Value Creation Award's performance-based vesting is based 50% on
absolute total shareholder return (TSR) goals and 50% on relative TSR goals, all
of which have been pre-established by the Board. The overall payout percentage
of the Shareholder Value Creation Award will equal the sum of the percentage of
Target Earned under each of the Cumulative Absolute TSR Goals and Relative TSR
Goals. Amounts earned are determined by linear interpolation if results are
between the TSR goals (both absolute and relative). Vesting will be determined
over a five-year performance period beginning on the grant date, based on the
TSR Goals* % of Target Earned Relative TSR Goals % of Target Earned
³75% 75% ³80th Percentile 75%
60% 50% 65th Percentile 50%
47% 25% 40th Percentile 25%
<47% 0% <40th Percentile 0%
* Resulting stock price plus dividends would be ~$602 at 47%, ~$655 at 60%, and
~$717 at 75%, in each case assuming a $2 quarterly dividend.
The number of initial PSUs granted to each of Messrs. Solomon and Waldron was
determined based on a stock price of $409.48 (the five-day average closing price
from October 15, 2021 through October 21, 2021), which stock price will also be
used to calculate achievement of the absolute TSR goals. The peer group for
relative TSR is Bank of America Corporation, Citigroup Inc., JPMorgan Chase &
Co., Morgan Stanley, The Bank of New York Mellon Corporation and Wells Fargo &
Vesting is also subject to continuous service with Goldman Sachs until the end
of the five-year performance period, with limited exceptions provided in the
applicable award agreement and the Goldman Sachs Amended and Restated Stock
Incentive Plan (2021) (the SIP), such as death and disability. Any amounts
earned under the Shareholder Value Creation Award are settled in shares of
common stock of Goldman Sachs that will deliver at the end of the performance
period, on or about the fifth anniversary of the date of grant of the award.
These shares will be subject to transfer restrictions for one additional year
after delivery, and also will be subject to forfeiture and clawback provisions,
including recapture for events constituting "Cause," failing to perform
obligations under any agreement with Goldman Sachs, and participating in (or
otherwise overseeing or being responsible for, depending on the circumstances,
another individual's participation) materially improper risk analysis or failing
sufficiently to raise concerns about risks during the performance period.
This summary of the Shareholder Value Creation Award is qualified in its
entirety by reference to the applicable award agreement (a form of which is
attached as an exhibit to the Registrant's most recent Annual Report on
Form 10-K) and to the SIP (which is attached as an annex to the proxy statement
for Registrant's most recent Annual Meeting of Shareholders).
(1) Grant date fair value reflects a discount related to the probability of
achieving the award's goals and transfer restrictions on the common stock
underlying these PSUs.
© Edgar Online, source Glimpses