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Goldman Sachs' decision to potentially cut executive bonuses following the 1MDB scandal is a testament to the shareholder and public outrage over the debacle.
The prestigious investment bank has announced that it could retain millions of dollars in bonuses from former managing director Lloyd Blankfein and two other retired executives, based on the results of ongoing investigations into the Malaysian fund. .
Premiums were approved for the first time in 2011 and annual payments depend on the company's performance over the next eight years. In the case of Blankfein, the bonus started at $ 7 million and nearly doubled, according to US securities documents.
Beyond the bonuses, Goldman also said he could recoup the compensation of current chief executive, David Solomon, and two other current leaders, chairman John Waldron and chief financial officer Stephen Scherr.
Solomon received $ 23 million last year, including $ 15.4 million in stock options.
The bonus announcement aimed to send a message to shareholders who are unhappy with how the corruption scandal has tarnished the bank's image as it strives to expand its banking business. individuals via the Marcus online platform, according to two people familiar with the issue.
The board of directors wants shareholders to know that he is not blind to the gravity of the situation, said one of the sources, adding that the message was not meant to be an admission of wrongdoing.
In addition to Solomon, who also serves as chairman, Goldman's 13-member board includes ArcelorMittal's executive director, Lakshmi Mittal.
According to experts, Goldman Sachs could be fined $ 2 billion in a criminal case related to 1MDB.
In January, Solomon apologized to Malaysia for the scandal and involvement of Goldman's former partner, Tim Leissner, who had pleaded guilty to violating US laws against bribery and corruption. money laundering.
Solomon's statement stands out from that of Blankfein, who had declared at the height of the 2009 financial crisis that he was "doing God's work" by helping companies raise money.
US authorities have accused a Malaysian financial intermediary, Low Taek Jho, as well as Leissner and another former Goldman banker, Ng Chong Hwa, of conspiring to launder billions of dollars. the development of the country. Goldman raised $ 600 million in fees and revenues related to 1MDB bond transactions.
US authorities say more than $ 2.7 billion has been allocated to bribes and bribes.
Goldman Sachs revealed that the company had made its first transaction with 1MDB to finance a $ 1.7 billion purchase of power plants while rival Lazard Bank had warned that the operation seemed suspicious, according to a source.
In addition, a division of the investment bank agreed to do business with Low Taek Jho, although it was dismissed in 2011 by opening an account, officials of the bank can not determine the source of its heritage, told AFP a person familiar with the file.
"The due diligence functions at Goldman Sachs have collapsed," said Richard Bove, an badyst at Odeon Capital and a frequent critic in Goldman. "If you want to collect $ 6 billion for one person, you'd better know everything about that person."
The three transactions were presented to the bank's Asian and corporate investment committees, forcing 1MDB to pay higher fees than usual because 1MDB was opposed to a loan union, imposing on Goldman all risks, a source said.
Goldman declined to comment and Lazard did not respond to requests for comment.
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