DEF 14A 1 d552223ddef14a.htm DEF 14A DEF 14A
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant                 Filed by a Party other than the Registrant

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to Section 240.14a-12

The Goldman Sachs Group, Inc.

 

(Name of Registrant as Specified in its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1) Title of each class of securities to which transaction applies:

 

  

 

  (2) Aggregate number of securities to which transaction applies:

 

  

 

  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

  

 

  (4) Proposed maximum aggregate value of transaction:

 

  

 

  (5) Total fee paid:

 

  

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

  (1) Amount Previously Paid:

 

  

 

 

  (2) Form, Schedule or Registration Statement No.:

 

  

 

 

  (3) Filing Party:

 

  

 

 

  (4) Date Filed:

 

   

 


Table of Contents
LOGO  

 

   

 

The Goldman Sachs Group, Inc.

 

 

 

Annual Meeting

of Shareholders

Proxy Statement

 

                                                                                                                                                                                                                                          

2018

 


Table of Contents

The Goldman Sachs Group, Inc.

 

The Goldman Sachs Group, Inc.

Notice of 2018 Annual Meeting of Shareholders

 

   

 

TIME AND DATE

 

 

 

8:30 a.m., local time, on Wednesday, May 2, 2018

 

   

 

PLACE

 

 

 

Goldman Sachs offices located at: 30 Hudson Street, Jersey City, New Jersey 07302

 

   

 

ITEMS OF BUSINESS

 

 

    Election to our Board of Directors of the 11 director nominees named in the attached Proxy Statement for a one-year term

 

   An advisory vote to approve executive compensation (Say on Pay)

 

    Approval of The Goldman Sachs Amended and Restated Stock Incentive Plan (2018)

 

    Ratification of the appointment of PwC as our independent registered public accounting firm for 2018

 

    Consideration of shareholder proposals, if properly presented by the relevant shareholder proponents

 

    Transaction of such other business as may properly come before our 2018 Annual Meeting of Shareholders

 

   

 

RECORD DATE

 

 

The record date for the determination of the shareholders entitled to vote at our 2018 Annual Meeting of Shareholders, or any adjournments or postponements thereof, was the close of business on March 5, 2018

 

 

 

Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting to be held on May 2, 2018. Our Proxy Statement, 2017 Annual Report to Shareholders and other materials are available on our website at www.gs.com/proxymaterials.

By Order of the Board of Directors,

 

LOGO

Beverly L. O’Toole

Assistant Secretary

March 23, 2018

 

 

Your vote is important to us. Please exercise your shareholder right to vote. By March 23, 2018, we will have sent to certain of our shareholders a Notice of Internet Availability of Proxy Materials (Notice). The Notice includes instructions on how to access our Proxy Statement and 2017 Annual Report to Shareholders and vote online. Shareholders who do not receive the Notice will continue to receive either a paper or an electronic copy of our proxy materials, which will be sent on or about March 27, 2018. For more information, see Frequently Asked Questions.

 


Table of Contents

Table of Contents

 

Table of Contents

 

Letter from our Chairman and CEO     ii  

 

Letter from our Lead Director

    iii  

 

Executive Summary

    1  

 

2018 Annual Meeting Information

    1  

 

Matters to be Voted on at our 2018 Annual Meeting

    1  

 

Impact of Certain Tax-Related Items on the Firm’s 2017 Performance

    2  

 

Performance Highlights

    3  

 

Compensation Highlights

    7  

 

2018 Stock Incentive Plan Highlights

    9  

 

Corporate Governance Highlights

    10  

 

Shareholder Engagement

    13  

 

Corporate Governance

    15  

 

Item 1. Election of Directors

    15  

 

Our Directors

    15  

 

Independence of Directors

    24  

 

Structure of our Board and Governance Practices

    25  

 

Our Board Committees

    25  

 

Board and Committee Evaluations

    27  

 

Board Leadership Structure

    28  

 

Year-Round Review of Board Composition

    31  

 

Director Education

    32  

 

Commitment of our Board

    32  

 

Board Oversight of our Firm

    34  

 

Key Areas of Board Oversight

    34  

 

Compensation Matters

    37  

 

Compensation Discussion and Analysis

    37  

 

2017 NEO Compensation Determinations

    37  

 

Key Pay Practices

    46  

 

Framework for Compensation Decisions

    47  

 

Overview of Compensation Elements

    50  

 

Other Compensation Policies and Practices

    53  

 

GS Gives

    56  

Executive Compensation

    57  

 

2017 Summary Compensation Table

    58  

 

2017 Grants of Plan-Based Awards

    60  

 

2017 Outstanding Equity Awards at Fiscal Year-End

    61  

 

2017 Option Exercises and Stock Vested

    61  

 

2017 Pension Benefits

    62  

 

2017 Non-Qualified Deferred Compensation

    63  

 

Potential Payments Upon Termination or Change in Control

    65  

 

Report of our Compensation Committee

    68  

 

Item 2. An Advisory Vote to Approve Executive Compensation (Say on Pay)

    69  

 

Item 3. Approval of The Goldman Sachs Amended and Restated Stock Incentive Plan (2018)

    70  

 

Pay Ratio Disclosure

    77  

 

Non-Employee Director Compensation Program

    78  

 

Audit Matters

    82  

 

Report of our Audit Committee

    82  

 

Item 4. Ratification of PwC as our Independent Registered Public Accounting Firm for 2018

    82  

 

Items 5-6: Shareholder Proposals

    84  

 

Certain Relationships and Related Transactions

    88  

 

Beneficial Ownership

    91  

 

Additional Information

    94  

 

Frequently Asked Questions

    96  

 

Annex A: Calculation of Non-GAAP Measures

    A-1  

 

Annex B: Additional Details on Director Independence

    B-1  

 

Annex C: The Goldman Sachs Amended and Restated Stock Incentive Plan (2018)

    C-1  

 

Directions to our 2018 Annual Meeting of
Shareholders

    D-1  
 

 

This Proxy Statement includes forward-looking statements. These statements are not historical facts, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. Forward-looking statements include statements about potential revenue and growth opportunities. It is possible that the firm’s actual results, including the incremental revenues, if any, from such opportunities, and financial condition may differ, possibly materially, from the anticipated results, financial condition and incremental revenues indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in Goldman Sachs’ Annual Report on Form 10-K for the year ended December 31, 2017. Statements about Goldman Sachs’ revenue and growth opportunities are subject to the risk that the firm’s businesses may be unable to generate additional incremental revenues or take advantage of growth opportunities.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        i


Table of Contents

Letter from our Chairman and CEO

 

 

Letter from our Chairman and CEO   

 

LOGO

 

March 23, 2018

Fellow Shareholders:

You are cordially invited to attend the 2018 Annual Meeting of Shareholders of The Goldman Sachs Group, Inc. We will hold the meeting on Wednesday, May 2, 2018 at 8:30 a.m., local time, at our offices in Jersey City, New Jersey. Enclosed you will find a notice setting forth the items we expect to address during the meeting, a letter from our Lead Director, our proxy statement, a form of proxy and a copy of our 2017 annual report to our shareholders.

In our 2017 letter to our shareholders, which is included in the annual report, we describe our focus in achieving sustainable earnings growth and the strategic initiatives that are driving progress in each of our major businesses. We also discuss how the operating environment has shifted and the potential implications for our businesses. We are committed to providing our shareholders with long-term value, and we hope that you will find the letter informative.

I would like to personally thank you for your continued investment in Goldman Sachs. We look forward to welcoming many of you to our annual meeting. Your vote is important to us: even if you do not plan to attend the meeting in person, we hope your votes will be represented.

 

 

LOGO

Lloyd C. Blankfein

Chairman and Chief Executive Officer

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        ii


Table of Contents

Letter from our Lead Director

 

 

Letter from our Lead Director   

 

LOGO

 

March 23, 2018

To my fellow shareholders,

As our 2018 Annual Meeting approaches, it is my privilege as your Lead Director to reflect on the past year and share directly with you some highlights of the work of our Board. It will come as no surprise that 2017 was another eventful year for the firm, particularly given the rapidly changing business and regulatory environment across the globe.

Over the course of the year we saw the firm’s senior management remain steadfast in its focus on the firm’s operating performance, helping to drive revenue and pre-tax earnings growth across the firm with higher revenues in three of the firm’s four business segments, which helped offset a challenging backdrop for the firm’s market making businesses. Senior management also continued to remain focused on positioning the firm strategically for the future.

In my letter to you last year, I wrote about the importance of executive succession planning. Since then we have continued to work closely with our Chairman and CEO Lloyd Blankfein with respect to the firm’s long-term and emergency executive succession plans, meeting regularly with Lloyd and in closed and executive sessions. Over the course of 2017 and early 2018, our Board oversaw the successful transition of several executive officers, including members of our executive leadership team, as well as of key control-side leaders across the firm.

Importantly, as a result of our ongoing discussion and deliberation, our Board determined to take the next step in its succession plan for the CEO, identifying David Solomon as sole President and Chief Operating Officer. We are certain that David will continue to distinguish himself in this role and we look forward to working closely with him. As a result, it was announced earlier this month that Harvey Schwartz has decided to retire from the firm in April after an over 20-year career with the firm. Harvey has served with distinction in numerous leadership roles across the firm’s businesses, as Chief Financial Officer and most recently as President and Co-Chief Operating Officer, in each case making significant contributions to the firm and its culture.

These transitions are emblematic of the firm’s leadership bench, and we remain confident in the breadth, depth and commitment of the firm’s management team.

Inside and outside of our industry, the year was also marked by heightened attention to issues relating to culture and conduct. Our Board has long recognized the importance of oversight of the firm’s culture and reputation, and recent events serve to underscore that we must remain resolute in this focus. Matters relating to culture, conduct and reputation were discussed regularly during our meetings in 2017, including at our Public Responsibilities Committee.

Engagement and Commitment

First, I wanted to take this opportunity to report to you on my year of engagement as your Lead Director. In addition to 54 Board and standing committee meetings and 23 sessions our directors held without management present, in 2017 I had over 95 additional meetings, calls and engagements with the firm and its people, our shareholders, regulators and other constituents, including meetings with shareholders large and small representing approximately 28% of our shareholder base. This engagement is invaluable to me as Lead Director and helps to inform our Board’s deliberations. Hearing directly from our shareholders informs both me and our entire Board, and enables us to be more effective stewards of your shareholder capital. It is clear to me from these discussions that our shareholders expect our Board to think broadly about our stakeholders as we work with management to create value, including the role the firm plays within the communities in which we work and live. Accordingly, we are committed to maintaining our diligence in overseeing the firm’s performance, risk management and investment in our people and communities.

It is our goal to operate our Board in the most effective manner possible, and we are committed to evaluating ourselves accordingly. As a result of ongoing feedback and our annual Board and committee evaluation process,

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        iii


Table of Contents

Letter from our Lead Director

 

beginning at the end of 2017 we added more meetings of our Audit and Risk Committees to our schedule to provide our directors with additional opportunities to focus on the critical mandates of these committees.

Focus on Growth

I know from my own engagement with shareholders the importance you place on the creation of long-term shareholder value. During 2017 we provided advice and guidance to management on their strategic vision for a forward-looking growth plan, which was announced to the market in September 2017. To this end, over the course of the year we engaged regularly with management on the execution of firmwide, regional and divisional strategies focused on innovation and growth and supported by sound risk management.

Through ongoing monitoring of the firm’s progress on these growth initiatives and otherwise, we will continue to hold management accountable for driving and sustaining long-term growth for our firm.

Considerations Regarding Executive Compensation

As you will recall, during 2016 our Compensation Committee conducted a robust evaluation of the firm’s executive compensation structure, taking into account input from various key stakeholders, including you, our shareholders. This evaluation resulted in several changes to the firm’s executive compensation program, and we were pleased that shareholders at our 2017 annual meeting overwhelmingly supported this revised approach. As described in the proxy statement, given this support we maintained a consistent executive compensation structure for 2017 annual compensation, which we believe appropriately incentivizes management and is consistent with our compensation principles.

Board Composition and Diversity

Appropriate Board composition is critical to our Board’s ability to carry out all of its responsibilities, including those described above and in this proxy statement. We are keenly aware that our shareholders, regulators and other constituents are highly interested in board composition, particularly as it relates to diversity. We have been, and will continue to be, committed to diversity, broadly defined, on our Board. With this in mind, we have been engaged actively in a director search with a particular focus on diverse candidates.

More broadly with respect to our Board succession planning, we have asked Bill George, who recently turned 75, to stand for re-election at our 2018 annual meeting. We benefit immensely from Bill’s judgment, counsel and institutional knowledge across a broad range of topics, including with respect to reputational risk. Bill served as Chair of the Board’s Committee to Oversee the Business Standards Committee in 2010, including the adoption of the 39 recommendations for the firm, and has served as Chair of our Public Responsibilities Committee since its initial inception.

In addition, we determined that it would be beneficial to transition the chairmanship of our Compensation Committee at this time to provide appropriate succession given that Jim Johnson, our current Chair, will turn 75 before next year’s annual meeting. To this end, beginning in May, Michele Burns will become the Chair of our Compensation Committee and Mark Winkelman will replace Michele as the Chair of our Risk Committee. Michele has distinguished herself over the course of her tenure on our Board, and in this new role will draw upon her background as the former CEO of Mercer LLC and as the past Chair of both our Audit and Risk Committees. Mark has similarly demonstrated keen judgment and effective risk management over the course of his career, including in his current service on our Board and Risk Committee. Mark also brings important connectivity from his role as the Chair of the Risk Committee of our subsidiary, Goldman Sachs International. We are grateful to Jim for his invaluable service as the Chair of our Compensation Committee, and we look forward to his continued input and the benefit of his institutional knowledge on our Board over his remaining tenure.

On behalf of our Board, I am grateful for your ongoing support of both our Board and the firm. I look forward to continuing our dialogue as we invest together in the future of this firm.

 

 

LOGO

Adebayo O. Ogunlesi

Lead Director

 

iv        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Executive Summary | 2018 Annual Meeting Information

 

Executive Summary

This summary highlights certain information from our Proxy Statement for the 2018 Annual Meeting. You should read the entire Proxy Statement carefully before voting. Please refer to our glossary in Frequently Asked Questions on page  96 for definitions of certain capitalized terms.

2018 Annual Meeting Information

 

       

DATE AND TIME

 

   

PLACE

 

   

RECORD DATE

 

   

ADMISSION

 

 

8:30 a.m., local time Wednesday, May 2, 2018

   

 

Goldman Sachs

offices located at:

30 Hudson Street,

Jersey City, New Jersey

 

   

 

March 5, 2018

   

 

Photo identification

and proof of ownership

as of the record date

are required to attend

the Annual Meeting

 

 

For additional information about our Annual Meeting, including how to access the audio webcast, see Frequently Asked Questions.

Matters to be Voted on at our 2018 Annual Meeting

 

     
     

BOARD        

RECOMMENDATION        

   PAGE    
     

Item  1. Election of Directors

 

  

FOR each director        

 

   15     

 

     

Other Management Proposals

 

         
     

Item  2. An Advisory Vote to Approve Executive Compensation (Say on Pay)

 

  

FOR        

 

   69     

 

     

Item  3. Approval of The Goldman Sachs Amended and Restated Stock Incentive Plan (2018)

 

  

FOR        

 

   70     

 

     

Item  4. Ratification of PwC as our Independent Registered Public Accounting Firm for 2018

 

  

FOR        

 

   82     

 

     

Shareholder Proposals

 

         

Item  5. Shareholder Proposal Requesting Report on Lobbying

Requests that the firm prepare a report disclosing various policies, procedures and expenditures relating to lobbying

 

  

AGAINST        

 

   84     

 

Item  6. Shareholder Proposal Regarding Amendments to Stockholder Proxy Access

Requests that the firm amend its governing documents to allow an unlimited number of shareholders to form a nominating group to submit proxy access director nominees

 

 

  

AGAINST        

 

   86     

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        1


Table of Contents

Executive Summary | Impact of Certain Tax-Related Items on the Firm’s 2017 Performance

 

Impact of Certain Tax-Related Items on the Firm’s 2017 Performance

   During 2017, the Tax Cuts and Jobs Act (U.S. Tax Legislation) was enacted, resulting in a $4.4 billion one-time estimated income tax expense for the firm. This tax expense included an approximately $3.3 billion expense associated with a one-time deemed repatriation tax on foreign earnings and an approximately $1.1 billion expense related to the remeasurement of our deferred tax assets, and reduced ROE by 590 basis points and EPS by $10.75.

  When making NEO compensation determinations, our Compensation Committee excluded the impact of this tax expense; a summary of this adjustment (which resulted in an increase to ROE and EPS) is shown below.

 

      LOGO    LOGO

  When making NEO compensation determinations, our Compensation Committee also adjusted ROE and EPS to exclude the $719 million income tax benefit arising from the firm’s required adoption of a new accounting standard relating to employee share-based payment accounting (Stock Accounting Standard).

   Excluding this benefit resulted in a decrease to our adjusted ROE from 10.8% to 9.8% and a decrease to our adjusted EPS from $19.76 to $18.01.

   The Committee believed it was appropriate to primarily assess 2017 firmwide performance excluding both the estimated negative impact of the charge related to U.S. Tax Legislation as well as the positive impact of the Stock Accounting Standard given that both were outside management’s control and did not reflect the firm’s operating performance.

   In the Performance Highlights that follow, ROE and EPS are presented excluding only the estimated impact of U.S. Tax Legislation in order to improve comparability against peer results. For additional detail on both adjustments, please see Annex A.

 

2        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

4.9% 590 bps 10.8% $9.01 $10.75 $19.76 GAAP ROE Impact of U.S. Tax Legislation ROE Ex. U.S. Tax Legislation GAAP EPS Impact of U.S. Tax Legislation EPS Ex. U.S. Tax Legislation


Table of Contents

Executive Summary | Performance Highlights

 

Performance Highlights

We encourage you to read the following Performance Highlights as background to this Proxy Statement.

 

 

In 2017, we delivered higher net revenues, positive operating leverage and stronger pre-tax earnings year-over-year despite a challenging environment for our market-making businesses. We closed the year with a leading franchise across many of our businesses and an articulated strategy to grow net revenues and earnings.

 

 

 

  BUSINESS PERFORMANCE HIGHLIGHTS

 

  Net revenues in 2017 were up 5% year-over-year, outpacing total operating expenses, which were up only 3% year-over-year, resulting in solid pre-tax earnings growth of 8% to $11.1 billion and EPS (Ex. U.S. Tax Legislation) of $19.76, up 21% year-over-year.

»  3 of 4 segments posted higher net revenues year-over-year, with record Investment Management net revenues and Investment Banking posting its second-best year of net revenues.

»  Pre-tax Margin was 34.7%, up 100 basis points as compared to 2016.

   Since 2009 year-end, we have grown BVPS an average of 6% per year.

   We have shown a commitment over time to prudently managing our expense base. Examples include:

»  37.0% Compensation Ratio, down 110 basis points as compared to 2016.

»  Approximately $2.8 billion in announced and completed expense initiatives since 2011.1

»  930 basis points reduction in average annual Compensation Ratio for 2009-2017 as compared to 2000-2007.

2017 vs. 2016 Performance

 

 

LOGO

 

 

RETURN OUTPERFORMANCE VS. GLOBAL PEERS

 

The firm continued to post strong relative performance against its global peer group.2 Our 2017 ROE (Ex. U.S. Tax Legislation) of 10.8% was approximately 190 basis points higher than the U.S. Peer average and approximately 820 basis points higher than the European Peer average (excluding the impact of U.S. Tax Legislation for all firms). On a U.S. GAAP basis, GS ROE was 4.9%, which is depicted in the chart below.

ROE Ex. U.S. Tax Legislation3

 

 

LOGO

 

1  Comprised of $1.9 billion run-rate savings completed in 2011-2012 and $0.9 billion run-rate savings completed in 2016.

 

2  U.S. Peers refers to Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley. European Peers refers to Barclays, Credit Suisse, Deutsche Bank and UBS.

 

3  Based on public disclosures available as of March 20, 2018. For additional detail on the U.S. Tax Legislation-related adjustment for GS, please see Annex A. On a GAAP basis, average ROE for our U.S. Peers was 5.2% and average ROE for our European Peers was -1.2%.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        3

+5% +3% +8% Net Revenues Expenses Pre-tax Earnings 10.9% 10.8% 4.9% 9.7% 7.9% 7.4% 7.0% 3.1% 1.0% -1.0% JPM GS MS BAC UBS C CS DB BARC


Table of Contents

Executive Summary | Performance Highlights

 

 

 

DIVERSIFIED FRANCHISE

 

During 2017, we maintained strong franchise positions across our businesses, invested in opportunities for growth and maintained a diversified mix of net revenues.

The diversity of our net revenue mix was instrumental in our performance for the year, with three of our four segments producing solid revenue growth leading to an overall increase in the firm’s net revenues.

 

Year-over-Year Net Revenue Change   

Contribution to Firmwide 2017

Net Revenues by Segment

 

LOGO

  

 

LOGO

Key Business Highlights

 

 

INVESTMENT BANKING

 

 

 

 INVESTING & LENDING

 

  #1 in worldwide announced and completed M&A and #1 in worldwide equity and equity-related offerings and common stock offerings

 

  Record Underwriting and strong Financial Advisory results yielded second-highest annual net revenues; record Debt Underwriting net revenues reflect our leading leveraged finance franchise

 

 

    Continued support for our clients through lending activities and capital commitment

 

    Broadening our client base in the retail space with Marcus: by Goldman Sachs

 

 

INSTITUTIONAL CLIENT SERVICES

 

 

 

 INVESTMENT MANAGEMENT

 

   Challenging environment characterized by low levels of volatility and low client activity

 

  Following expense and capital efficiency-focused initiatives, we shifted to focus on net revenue growth

 

    Assets under supervision up 8% year-over-year to record $1.49 trillion amid challenging backdrop for active asset managers

 

    Record annual net revenues, including record management and other fees

 

 

4        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

Year-over-Year Net Revenue Change Investing & Lending Investment Banking Investment Management Institutional Client Services +61% +18% +7% -18% Contribution to Firmwide 2017 Net Revenues by Segment Investment Management 19% Investment Banking 23% FICC 17% Equities 21% Investing & Lending 20% Institutional Client Services


Table of Contents

Executive Summary | Performance Highlights

 

 

 

TRACK RECORD OF CAPITAL RETURN

 

 

    We have been able to maintain a leading track record of returning capital to our shareholders.

 

  »   We finished 2017 with record low shares of Common Stock outstanding of 374.8 million at year-end.

 

  »   We returned approximately $8 billion of capital in 2017 through share repurchases and common dividends.

 

Average Annual Payout Ratio: 2013-20171

 

 

LOGO

 

27%

Reduction in Common

Stock outstanding2

(2009 - 2017)

 

 
 

374.8mm

2017YE record

low shares of Common

Stock outstanding

 

 
 

~$8bn

Capital returned to

common shareholders

in 2017

 

 

1  For 2017, excludes the impact of U.S. Tax Legislation for GS and its U.S. Peers based on public disclosures. For additional detail on adjustments for GS, please see Annex A.

 

2  Change reflects 2009 year-end to 2017 year-end.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        5

94% 58% GS U.S. Peer Average


Table of Contents

Executive Summary | Performance Highlights

 

 

 

GROWTH INITIATIVES TO DRIVE REVENUES

 

 

    In 2017, our management team announced a strategy outlining a $5 billion net revenue growth plan.

 

    Throughout the year, management began to execute on the growth plan with an expected 3-year time horizon, and we are working intensely to achieve this goal.

 

    The plan articulated specific initiatives underway across businesses, but can be summarized into the below categories:

 

 

LOGO

 

1  Included in our Investing & Lending segment.

 

2  Estimated as of September 2017, assumed pre-tax earnings of $2.5 billion, taxed at our marginal rate, and an estimated incremental $5 billion of attributed equity.

 

6        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

Estimated Year 3 Net Revenue Opportunity $1.0bn+ $2.0bn+ $0.5bn+ $1.0bn+ $0.5bn+ $5.0bn+ FICC opportunity Firmwide lending and financing efforts1 Marcus loan and deposit platform $1.0bn+ PWM lending and GS Select $500mm+ Institutional lending and financing $500mm+ Investment Banking coverage strategy Investment Management Equities clients coverage strategy Total firmwide net revenue growth opportunity Firmwide Impact $2.5bn+ Pre-tax earnings 150bps+ ROE expansion2


Table of Contents

Executive Summary | Compensation Highlights

 

Compensation Highlights (see Compensation Matters, beginning on page 37)

We provide highlights of our compensation program below. It is important that you review our CD&A and compensation-related tables in this Proxy Statement for a complete understanding of our compensation program.

 

 

2017 NEO COMPENSATION DETERMINATIONS

 

The following table summarizes our Compensation Committee’s 2017 annual compensation decisions for our NEOs (dollar amounts shown in millions).

 

       

NAME AND

PRINCIPAL POSITION

 

  SALARY/FIXED  

  ALLOWANCE ($)  

   

    ANNUAL VARIABLE COMPENSATION ($)    

 

   TOTAL ($)  
   

 

    CASH    

 

   

 

  PSUS  

 

   

 

    RSUS/REST. STOCK          

 

  

 

EXECUTIVE LEADERSHIP TEAM

 

            
           

Lloyd C. Blankfein, Chairman and CEO

 

            2.00          4.40       17.60          24.00  
           

David M. Solomon, President and Co-COO

 

            1.85          5.75       13.41          21.00  
           

Harvey M. Schwartz (retiring)

President and Co-COO

 

            1.85          5.75       13.41          21.00  
           

R. Martin Chavez, Executive Vice President and CFO

 

            1.73          5.18       12.09          19.00  

 

VICE CHAIRMEN

 

            
           

Richard J. Gnodde, Vice Chairman

 

            1.85/8.15*          –               9.00      19.00  
           

Pablo J. Salame, Vice Chairman

 

            1.85          3.80               8.86      14.50  

Note: Mr. Chavez became our CFO in May 2017. Prior to that time, Mr. Schwartz served as our CFO. Mr. Schwartz will be retiring from the firm on April 20, 2018. For reference, 2016 annual compensation for Messrs. Blankfein and Schwartz was $22.0 million and $20.0 million, respectively.

 

* For 2017, Mr. Gnodde, who is based in the U.K., received a cash salary of $1.85 million and a fixed allowance of $8.15 million, payable approximately 37% in equity-based awards, with the remainder in cash. Mr. Gnodde received a higher level of fixed compensation than our U.S.-based NEOs as a result of applicable U.K. regulations. See page 50 for more details.

 

  Executive Leadership Team – 2017 Compensation Rationale        
    
 

 

   Our Compensation Committee determined to increase compensation for our Executive Leadership Team compared to 2016, including a 9% increase for our CEO. (See page 40 for additional information regarding determinations made for our Vice Chairmen.)

 

   In assessing 2017 performance, the Committee believed it was appropriate to exclude the estimated negative impact of the charge related to U.S. Tax Legislation and the positive impact of the Stock Accounting Standard, given these items were outside management’s control and did not reflect the firm’s operating performance.

 

   Key factors the Committee considered included:

 

»  The firm’s solid operating performance despite a challenging environment for certain of our businesses, including net revenue growth of 5%, pre-tax earnings growth of 8% and EPS growth of 11% (Ex. U.S. Tax Legislation and Stock Accounting Standard), in each case compared to 2016 and measured on both an absolute basis and relative to our U.S. Peers and European Peers;

 

»  Our focus on operating efficiency, which drove positive operating leverage, including net revenue growth that outpaced operating expense growth and a year-over-year decline in compensation ratio of 110 basis points;

 

»  The firm’s strong positioning in Investment Banking, including our continued #1 position in announced and completed M&A league tables, our #1 ranking in equity and equity-related offerings and our leading position in leveraged finance, as well as the second-highest ever annual revenues for the business;

 

»  The strength of our Investment Management business, where the firm achieved record annual net revenues and record assets under supervision amid a challenging backdrop for active asset managers; and

 

»  The individual performance of each member of our Executive Leadership Team, including:

 

 Each member’s strategic vision in formulating and presenting our $5 billion growth plan, which has provided greater transparency to investors, and in continuing our commitment to broadening our client base through Marcus: by Goldman Sachs;

 

 Continued embodiment of a “tone at the top” that focuses on items such as firm culture, adaptability, client service and risk management (including with respect to reputational and conduct issues); and

 

 The success of our Co-COOs and CFO in executing on the responsibilities of their new roles during 2017, and our CEO’s continued exemplary leadership in overseeing this transition.

 

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        7


Table of Contents

Executive Summary | Compensation Highlights

 

 

 

SAY ON PAY & SHAREHOLDER ENGAGEMENT

 

 

 

LOGO

    2016 Say on Pay Process and Streamlined Compensation Program. Following our 2016 Say on Pay Vote, our Compensation Committee requested that we engage in extensive shareholder outreach to discuss feedback on our executive compensation program. This process helped inform several changes to streamline the program’s structure.

 

    2017 Say on Pay Results. Our 2017 Say on Pay Vote received the support of approximately 93% of our shareholders. The Committee viewed this outcome as an indication of our shareholders’ predominantly positive reaction to the streamlined program.

 

    Extensive Shareholder Engagement. Although the outcome of our 2017 Say on Pay Vote was positive, the Committee nevertheless continues to view stakeholder feedback as a critical data point in evaluating and structuring our executive compensation program.

 

  »   In 2017, we (including, in certain cases, our Lead Director) met with shareholders representing approximately 40% of Common Stock outstanding to discuss compensation-related matters and other areas of focus for our shareholders.

 

    Ongoing Evaluation and Assessment. Following our 2017 Annual Meeting and throughout the fall and winter, the Committee continued to review our executive compensation program in light of a number of factors, including stakeholder feedback, input from the Committee’s independent compensation consultant, a review of public company practices and legal and regulatory developments (such as U.S. Tax Legislation).

 

  »   Ultimately, given the predominantly positive feedback received through shareholder engagement and the results of our 2017 Say on Pay vote, the Committee determined that the 2017 executive compensation program should remain largely consistent with the 2016 program.
    

 

KEY RECENT ENHANCEMENTS

(MADE FOR 2016 COMPENSATION)

 

 

Compensation structure streamlined; overlapping performance metrics eliminated

 

LTIP grants discontinued

 

PSUs redesigned to add relative ROE component

 

Significant increase in proportion of CEO’s annual variable compensation tied to ongoing performance metrics (80% in 2016 compared to 35% in 2015)

 

 

LOGO

 

    

 

KEY STAKEHOLDER FEEDBACK

(RECEIVED DURING 2017 PROXY SEASON ENGAGEMENT)

 

 

  Support for streamlined compensation structure

 

  Approval of increased proportion of PSUs in CEO/CFO pay

 

  Desire for greater detail on Committee’s approach in setting PSU thresholds and peer group

 

  Appreciation of commitment to shareholder engagement and response to feedback

 

  Endorsement of continued focus on alignment of pay and performance

 

  Focus on dilution and equity grant practices

 

 

LOGO

 

    

 

KEY 2017 COMPENSATION-RELATED FEATURES

 

 

For the first time, equity-based annual compensation for our entire Executive Leadership Team paid entirely in PSUs

 

Consistent with last year, 80% of CEO’s 2017 annual variable compensation tied to ongoing performance metrics (compared to U.S. Peer average of approximately 54%)1

 

Enhanced disclosure regarding PSU performance thresholds and peer group (see page 39)

 

Continued emphasis on extensive shareholder engagement and response to concerns

 

Ongoing focus on appropriately aligning pay and performance

 

Zero new shares requested under Stock Incentive Plan (see pages 9 and 70)

 

 

 

1  Based on 2017 CEO compensation data for U.S. Peers as reported in SEC filings (with respect to BAC, C and JPM) and in press articles citing bank spokesman (with respect to MS).

 

2016 SAY ON PAY VOTE SHAREHOLDER ENGAGEMENT AND COMMITTEE ACTION 2017 SAY ON PAY VOTE CONTINUED ENGAGEMENT AND ASSESSMENT

 

8        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Executive Summary | 2018 Stock Incentive Plan Highlights

 

2018 Stock Incentive Plan Highlights (see Item 3. Approval of The Goldman Sachs Amended and Restated Stock Incentive Plan (2018), beginning on page 70)

 

    

 

Key Facts

 

                          
   
           
 

3

Year extension of our

equity plan

 

   

0

New shares being

requested

 

   

 

LOGO

All other terms of plan

remain unchanged

 

 

 

 Equity-based awards play a fundamental role in aligning our compensation with our shareholders’ interests and regulatory requirements. Without a shareholder-approved equity plan, we would be reliant on cash-settled awards as our sole method of incentive-based compensation.

 

 

 

 SHAREHOLDER FEEDBACK

 

 

      In light of our extensive engagement with shareholders regarding our equity grant practices and the number of shares available for grant, our Board determined that it was appropriate to request no new shares for issuance and only to extend the term of our equity plan (which otherwise will expire at our 2019 Annual Meeting).

 

 

 IMPORTANCE OF EQUITY-BASED COMPENSATION

 

 

      Provide for Pay for Performance and Alignment with Shareholders. We believe that equity-based compensation provides employees with long-term exposure to the firm’s performance, aligns employees’ interests with those of our shareholders and discourages imprudent risk-taking; equity-based awards represent a larger portion of our compensation expense than for any of our U.S. Peers.

 

      Satisfy Regulatory Expectations. Our regulators across the globe, including the Federal Reserve Board and the Prudential Regulation Authority and the Financial Conduct Authority in the U.K., expect that a substantial portion of variable compensation awarded to executives and certain other employees will be equity-based.

 

 

 STRONG TRACK RECORD OF MITIGATING DILUTION

 

 

      In light of the importance of equity-based compensation to our firm, shareholders and regulators, we have developed an active capital management program to offset potential dilution.

 

      Since the end of 2009, our Common Stock outstanding has declined 27% to a record low as a result of our strong track record of returning capital to shareholders.

 

      This practice allows us to effectively manage dilution, but results in a higher burn rate.

Change in Common Stock Outstanding (2009YE–2017YE)

 

 

LOGO

 

1  BAC 2009 common shares outstanding includes 1,286 million shares relating to common equivalent securities, which were converted to common stock in February 2010. Excluding these shares, BAC’s common shares outstanding increased by 19% from 2009 to 2017.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        9

MS 31% BAC 4%1 C -10% JPM -13% GS -27%


Table of Contents

Executive Summary | Corporate Governance Highlights

 

Corporate Governance Highlights (see Corporate Governance, beginning on page 15)

 

 

KEY FACTS ABOUT OUR BOARD

 

We strive to maintain a well-rounded and diverse Board that balances financial industry expertise with independence, and the institutional knowledge of longer-tenured directors with the fresh perspectives brought by newer directors. As summarized below, our directors bring to our Board a variety of skills and experiences developed across a broad range of industries, both in established and growth markets, and in each of the public, private and not-for-profit sectors.

 

 

 

DIRECTOR SKILLS & EXPERIENCES

 

 

6

 

 

 

5

 

 

 

8

 

 

 

7

 

 

 

4

 

 

 

8

 

 

 

3

 

 

 

9

 

               

FINANCIAL  

SERVICES  

INDUSTRY  

 

OTHER

COMPLEX/

REGULATED

INDUSTRIES

 

 

 

RISK 

MANAGEMENT 

 

TALENT 

DEVELOPMENT 

 

TECHNOLOGY

 

 

PUBLIC 

COMPANY 

GOVERNANCE 

 

 

AUDIT/TAX/

ACCOUNTING

  GLOBAL

 

     
     

 

KEY BOARD STATISTICS

 

     
     
     

 

DIRECTOR NOMINEES

 

  

 

INDEPENDENCE OF NOMINEES

 

     

Board

 

  

11

 

  

9 of 11

 

     

Audit

 

  

3

 

  

All

 

     

Compensation

 

  

5

 

  

All

 

     

Governance

 

  

9

 

  

All

 

     

Public Responsibilities

 

  

3

 

  

All

 

     

Risk

 

  

6

 

  

5 of 6

 

 

 

13

 

   

 

41

   

 

23

   

 

~200

BOARD MEETINGS

IN 2017

   

STANDING COMMITTEE

MEETINGS IN 2017

   

DIRECTOR SESSIONS IN 2017 WITHOUT MANAGEMENT

PRESENT

 

   

MEETINGS OF  

LEAD DIRECTOR /  

CHAIRS OUTSIDE  

OF BOARD MEETINGS  

 

 

 

 

 

DIVERSITY OF DIRECTORS ENHANCES BOARD PERFORMANCE

 

 

36%

 

 

 

5.5 YEARS

 

 

63

 

 

44%

 

 

33%

         

JOINED IN THE LAST 5     

YEARS

  MEDIAN TENURE   MEDIAN AGE  

INDEPENDENT
NOMINEES DIVERSE
BY RACE, GENDER OR
SEXUAL ORIENTATION

 

 

 

INDEPENDENT
NOMINEES WHO
ARE NON-U.S.
OR DUAL CITIZENS

 

 

10        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Executive Summary | Corporate Governance Highlights

 

 

 

DIRECTOR NOMINEES

 

 

         
              

COMMITTEE MEMBERSHIP

(C: Chair)

      

OTHER

CURRENT U.S.-

LISTED PUBLIC

BOARDS*

 

 

NAME/AGE/INDEPENDENCE  

 

 

DIRECTOR  
SINCE  

 

 

OCCUPATION/CAREER  

HIGHLIGHTS  

 

 

  GOV  

 

 

  COMP  

 

 

  AUD  

 

 

  PRC    

 

 

  RISK  

      
                 

LOGO

 

 

     

Lloyd Blankfein, 63

Chairman and CEO

 

 

April

2003

 

 

Chairman & CEO,

The Goldman Sachs Group, Inc.

 

                         

0

 

             

LOGO

 

 

   

Adebayo Ogunlesi, 64

Independent Lead Director

 

 

October

2012

 

 

Chairman & Managing Partner, Global Infrastructure Partners

 

 

C

 

 

 

Ex-Officio

 

     

2

 

                       

 

LOGO

 

 

   

 

Michele Burns, 60

Independent

 

 

 

October

2011

 

 

Retired

(Chairman & CEO, Mercer LLC; CFO of each of: Marsh & McLennan Companies, Inc., Mirant Corp. and Delta Air Lines, Inc.)

 

 

 

 

 

         

C**

 

     

4***

 

                       

LOGO

 

 

   

Mark Flaherty, 58

Independent

 

 

December

2014

 

 

Retired

(Vice Chairman, Wellington Management Company)

 

 

 

     

 

     

 

     

0

 

                       

LOGO

 

 

   

William George, 75

Independent

 

 

December

2002

 

 

Senior Fellow, Harvard Business School (Retired, Chairman & CEO, Medtronic, Inc.)

 

 

 

 

 

     

C

 

       

0

 

                       

LOGO

 

 

   

James Johnson, 74

Independent

 

 

May

1999

 

 

Chairman,

Johnson Capital Partners

 

 

 

 

C**

 

     

 

       

0

 

                       

LOGO

 

 

   

Ellen Kullman, 62

Independent

 

 

December

2016

 

 

Retired

(Chairman & CEO, E.I. du Pont de Nemours and Company)

 

 

 

 

 

         

 

     

3

 

                       

LOGO

 

 

   

Lakshmi Mittal, 67

Independent

 

 

June

2008

 

 

Chairman & CEO,

ArcelorMittal S.A.

 

 

 

 

 

     

 

       

1

 

                       

LOGO

 

 

   

Peter Oppenheimer, 55

Independent

 

 

March

2014

 

 

Retired

(Senior Vice President and CFO, Apple, Inc.)

 

 

 

     

C

 

     

 

     

0

 

                       

LOGO

 

 

   

David Viniar, 62

Non-Employee

 

 

January

2013

 

 

Retired

(CFO, The Goldman Sachs Group, Inc.)

 

                 

 

     

1

 

                       

LOGO

 

 

     

Mark Winkelman, 71

Independent

 

 

December

2014

 

 

Private investor

 

 

 

     

 

     

**

 

     

0

 

 

* As per SEC rules.

 

** Effective May 2, 2018, Ms. Burns will become the Chair of our Compensation Committee and Mr. Winkelman will become the Chair of our Risk Committee.

 

*** Ms. Burns is retiring from one of her other boards at its upcoming 2018 annual meeting, after which she will serve on three other U.S.-listed public company boards.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        11


Table of Contents

Executive Summary | Corporate Governance Highlights

 

 

 

FOUNDATION IN SOUND GOVERNANCE PRACTICES AND SHAREHOLDER ENGAGEMENT

 

 

    Independent Lead Director with expansive duties

 

    Regular executive sessions of independent and non-employee directors

 

    Focus of our independent directors on executive succession planning

 

    CEO evaluation process conducted by our Lead Director with our Governance Committee

 

    Comprehensive process for Board refreshment, including a focus on diversity and on succession for Board leadership positions

 

    Annual Board and Committee evaluations, which incorporate feedback on individual director performance (see page 27 for more details)

 

    Candid, one-on-one discussions between our Lead Director and each non-employee director supplementing formal evaluations

 

    After engagement with shareholders, proactive adoption of a proxy access right for shareholders. In addition, shareholders are welcome to continue to recommend director candidates for consideration by our Governance Committee

 

    Active, year-round shareholder engagement process, whereby we, including our Lead Director, meet and speak with our shareholders and other key constituents
    Board and Committee oversight of environmental, social and governance (ESG) matters

 

    Directors may contact any employee of our firm directly, and our Board and its Committees may engage independent advisors at their sole discretion

 

    Annual elections of directors (i.e., no staggered board)

 

    Majority voting with resignation policy for directors in uncontested elections

 

    Shareholders holding at least 25% of our outstanding shares of Common Stock can call a special meeting of shareholders

 

    No supermajority vote requirements in our charter or By-laws

 

    Executive retention and share ownership requirements require significant long-term share holdings by our NEOs (see page 53 for more detail)

 

    Director share ownership requirement of 5,000 shares or RSUs, with a transition period for new directors

 

  » All RSUs granted as director compensation must be held until the year after a director retires from our Board. Directors are not permitted to hedge or pledge these RSUs
 

 

 

LOGO

 

12        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

WORKING DYNAMICS Candid discussions Open access to management & information Focus on reputation BOARD COMPOSITION Broad range of skills & experiences Independence Diversity BOARD EFFECTIVENESS BOARD STRUCTURE Strong Lead Director role 5 standing Committees GOVERNANCE PRACTICES Candid self-evaluation Oversight of CEO/management performance Board/management succession planning


Table of Contents

Executive Summary | Shareholder Engagement

 

Shareholder Engagement

 

  Commitment to Active Engagement with our Shareholders       
    
  Constituents’ views regarding matters affecting our firm are important to our Board. We employ a year-round approach to engagement that includes proactive outreach as well as responsiveness to targeted areas of focus.

 

 

 

 

OUR APPROACH

 

 

     

 

 

 

WHO

 

 

 

 

 

 

 

WHEN & HOW

 

 

 

 

 

 

 

APPROACH

 

 

 

 

   Shareholders

 

  ESG Rating Firms

 

   Fixed-Income Investors

 

  Proxy Advisory Firms

 

   Prospective Shareholders

 

  Thought Leaders

 

 

   Year-round

 

  Additional targeted outreach ahead of annual meetings and as needed

 

  In-person meetings

 

  Teleconferences and phone calls

 

   Conferences

 

 

Firm Engagement

 

  Led by Investor Relations (IR), including targeted outreach
and open lines of communication for inbound inquiries

 

  Feedback provided
to Board throughout the year from these interactions and on other key areas of focus

 

 

 

 

Board Engagement

 

  Led by our Lead
Director, who meets regularly with stakeholders

 

  Lead Director provides feedback to fellow directors about engagements

 

 

DEPTH OF ENGAGEMENT

 

We continued to conduct year-round, proactive engagement on corporate governance matters in 2017:

 

    Targeted outreach to top 150 shareholders ahead of 2017 annual meeting

 

    IR met with shareholders representing more than 40% of Common Stock outstanding during 2017

 

    Lead Director met with 20 investors in 2017, representing approximately 28% of Common Stock outstanding

The diverse views of our shareholders were relayed to our Board on topics including:

 

 

LOGO

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        13

Compensation quantum & structure within firm’s pay-for-performance culture Lead Director duties, executive succession planning & director evaluations Business opportunities & risk management considerations EXECUTIVE COMPENSATION REPUTATIONAL RISK CORPORATE GOVERNANCE PRACTICES APPROACH TO ESG IMPACT OF REGULATION BOARD COMPOSITION Continued focus on culture, business standards & reputational risk management For more information please see the following page Director skill sets, independence & diversity


Table of Contents

Executive Summary | Shareholder Engagement

 

 

 

FOCUS ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE TOPICS

 

 

 

 

Our approach to ESG issues continues to be of interest to our shareholders. In 2017, approximately two-thirds of our engagement conversations included a focus on ESG factors. The key topics discussed in those conversations are illustrated by the examples in the chart below.

 

 

 

ESG TOPICS IN FOCUS

 

LOGO

 

 

DIVERSITY

 

 

ENVIRONMENTAL

& SOCIAL RISK

MANAGEMENT

 

 

 

SUSTAINABILITY

OF OUR

OPERATIONS

 

 

CLIMATE

CHANGE

 

 

BUSINESS

STANDARDS

AND CULTURE

 

 

ESG

INTEGRATION

IN BUSINESS

Example:

 

Gender pay equity

 

Example:

 

Potential impacts on

indigenous peoples

 

Example:

 

Power Purchase Agreements facilitating

the development of

new renewable energy

resources

 

 

Example:

 

Progress toward our

$150bn clean energy

target

 

Example:

 

Employee training

 

Example:

 

Growth of ESG and impact

investing in

Investment Management

We take an integrated approach to ESG, focusing on both opportunities and risks across our global businesses.

 

    Our ESG-related policies and procedures are outlined in detail in the “Environmental, Social and Governance” reporting section on our website at www.gs.com/corpgov.

 

    In addition, we highlight annually in our online ESG Report the areas in which we have demonstrated a commitment to finding effective ways to tackle economic, social and environmental challenges.

 

    Our Board’s Public Responsibilities Committee has primary oversight of the firm’s approach to ESG, which includes reviewing key ESG-related policies such as our Environmental Policy Framework and our annual ESG Report.

 

  »   Other ESG matters are also reviewed by the full Board or its other Committees as part of their respective mandates.

 

14        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

Corporate Governance

Item 1. Election of Directors

 

  Proposal Snapshot — Item 1. Election of Directors       
    
  What is being voted on . Election to our Board of 11 director nominees.

 

Board recommendation. After a review of the individual qualifications and experience of each of our director nominees and his or her contributions to our Board, our Board determined unanimously to recommend that shareholders vote FOR all of our director nominees.

 

 

 

 

OUR DIRECTORS

 

Our Corporate Governance Guidelines provide that a director will typically retire at the annual meeting following their 75th birthday, unless our Governance Committee recommends his or her continuation on the Board in light of a review of all relevant circumstances. Upon turning 75, in accordance with our Corporate Governance Guidelines, Bill George tendered his retirement to our Lead Director for consideration.

Our Board, upon the recommendation of our Governance Committee, determined to request that Mr. George stand for re-election at our 2018 Annual Meeting, taking into account his dedicated service, including as the Chair of the Board’s Committee to Oversee the Business Standards Committee in 2010 and as the founding Chair of our Public Responsibilities Committee.

In connection with our continued succession planning for Board leadership roles, effective May 2, 2018, Michele Burns will become the Chair of our Compensation Committee, transitioning from Jim Johnson, our current Chair, who will turn 75 prior to our 2019 Annual Meeting. Mark Winkelman will then replace Ms. Burns as the Chair of our Risk Committee. Ms. Burns and Mr. Winkelman have each distinguished themselves in their roles on the Board, and we are confident that they will continue to do so in their new leadership roles. We are grateful to Mr. Johnson for his distinguished tenure as the Chair of our Compensation Committee, and we look forward to his continued guidance and input.

For more information on our process for Board refreshment, see —Structure of our Board and Governance Practices—Year-Round Review of Board Composition.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        15


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

Board of Directors’ Qualifications and Experience

Our director nominees have a great diversity of experience and bring to our Board a wide variety of skills, qualifications and viewpoints that strengthen their ability to carry out their oversight role on behalf of shareholders.

 

 

 

    CORE QUALIFICATIONS AND EXPERIENCES

 

 

 

     

 

  DIVERSITY OF SKILLS AND EXPERIENCES

 

 

 

 

 Integrity, business judgment & commitment

 

 Demonstrated management ability

 

 Extensive experience in the public, private or not-for-profit sectors

 

 Leadership & expertise in their respective fields

 

 Financial literacy

 

 Involvement in educational, charitable
& community organizations

 

 Strategic thinking

 

 Reputational focus

   

 

+  Financial services industry

 

+  Complex & regulated industries

 

+  Risk management

 

+  Public company / corporate governance

 

+  Global experience

 

+  Technology

 

+  Audit, tax, accounting & preparation of financial statements

 

+  Compliance

 

+  Operations

 

+  Established & growth markets

 

+  Credit evaluation

 

+  Environmental, social & governance

 

+  Talent development

 

+  Academia

 

+  Business ethics

 

+  Government, public policy & regulatory affairs

 

Given the nature of our business, our Governance Committee continues to believe that directors with current and prior financial industry experience, among other skills, are critical to our Board’s effectiveness. We take very seriously, however, any actual or perceived conflicts of interest that may arise, and have taken various steps to address this.

For example, in addition to our policies on director independence and related person transactions, we maintain a policy with respect to outside director involvement with financial firms, such as private equity firms or hedge funds. Under this policy, in determining whether to approve any current or proposed affiliation of a non-employee director with a financial firm, our Board will consider, among other things, the legal, reputational, operational and business issues presented, and the nature, feasibility and scope of any restrictions, procedures or other steps that would be necessary or appropriate to ameliorate any perceived or potential future conflicts or other issues.

 

 

 

Diversity is an important factor in our consideration    

of potential and incumbent directors

 

  
    
  Our Governance Committee considers a number of demographics, including race, gender, ethnicity, sexual orientation, culture and nationality, seeking to develop a board that, as a whole, reflects diverse viewpoints, backgrounds, skills, experiences and expertise.

 

Among the factors our Governance Committee considers in identifying and evaluating a potential director candidate is the extent to which the candidate would add to the diversity of our Board. The Committee considers the same factors in determining whether to re-nominate an incumbent director.

 

Diversity is also considered as part of the annual Board evaluation.

 

 

 

 

16        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

Director Tenure: A Balance of Experiences

Our nominees have an average tenure of 8 years and a median tenure of approximately 5.5 years. This experience balances the institutional knowledge of our longer-tenured directors with the fresh perspectives brought by our newer directors.

 

 

LOGO       

Years of Experience

 

 

Comprehensive Re-Nomination Process    

 
   
 

 

We appreciate the importance of critically evaluating individual directors and their contributions to our Board in connection with re-nomination decisions.

 

In considering whether to recommend re-nomination of a director for election at our Annual Meeting, our Governance Committee conducts a detailed review, considering factors such as:

 

  The extent to which the director’s skills, qualifications and experience (including that gained due to tenure on our Board) continue to contribute to the success of our Board;

 

  Feedback from the annual Board evaluation and individual discussions between each non-employee director and our Lead Director;

 

  Attendance and participation at, and preparation for, Board and Committee meetings;

 

   Independence;

 

  Shareholder feedback, including the support received by director nominees elected at our 2017 Annual Meeting of Shareholders;

 

   Outside board and other affiliations, including any actual or perceived conflicts of interest; and

 

  The extent to which the director continues to contribute to the diversity of our Board.

 

Each of our director nominees has been recommended for election by our Governance Committee and approved and re-nominated for election by our Board.

If elected by our shareholders, our director nominees, all of whom are currently members of our Board, will serve for a one-year term expiring at our 2019 Annual Meeting of Shareholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal.

All of our directors must be elected by majority vote of our shareholders.

    A director who fails to receive a majority of FOR votes will be required to tender his or her resignation to our Board.

    Our Governance Committee will then assess whether there is a significant reason for the director to remain on our Board, and will make a recommendation to our Board regarding the resignation.

For detailed information on the vote required for the election of directors and the choices available for casting your vote, please see Frequently Asked Questions.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        17

# of Directors <5 YEARS 4 DIRECTORS 5-7 YEARS 3 DIRECTORS 7-10 YEARS 1 DIRECTOR 10+ YEARS 3 DIRECTORS


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

Biographical information about our director nominees follows. This information is current as of March 1, 2018 and has been confirmed by each of our director nominees for inclusion in our Proxy Statement. There are no family relationships between any of our directors or executive officers.

 

 
 

LOGO

 

Lloyd C. Blankfein, 63

 

Chairman and CEO

 

 

Director Since: April 2003

 

Other U.S.-Listed Company Directorships

 

     Current: None

 

     Former (Past 5 Years): None

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Committed and deeply engaged leader with strong communication skills: Over 30 years of experience in various positions across our firm. Mr. Blankfein utilizes this firm-specific knowledge and experience in his role as Chairman and CEO to, among other things, lead the firm and its people, help protect and enhance our culture and articulate a vision of the firm’s strategy. Mr. Blankfein also uses strong communication skills to guide Board discussions and keeps our Board apprised of significant developments in our business and industry

 

     Extensive market and industry knowledge: Leverages extensive familiarity with all aspects of the firm’s industry and business, including our risk management practices and strategy

 

    Face of our firm: Drawing from extensive interaction with our clients, investors and other constituents, provides additional perspective to our Board

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

    Goldman Sachs

 

»   Chairman and Chief Executive Officer (June 2006 – Present)

 

»   President and Chief Operating Officer (January 2004 – June 2006)

 

»   Vice Chairman with management responsibility for FICC and Equities Divisions (April 2002 – January 2004)

 

»    Co-head of FICC (1997 – April 2002)

 

»   Head and/or Co-head of the Currency and Commodities Division (1994 – 1997)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Member, Dean’s Advisory Board, Harvard Law School

 

     Member, Board of Dean’s Advisors, Harvard Business School

 

     Member, Dean’s Council, Harvard University

 

    Member, Advisory Board, Tsinghua University School of Economics and Management

 

     Member, Board of Overseers, Weill Cornell Medical College

 

     Member, Board of Directors, Partnership for New York City

 

EDUCATION

 

     Graduate of Harvard College and Harvard Law School

 

   

 

18        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 

 
 

LOGO

 

Adebayo O. Ogunlesi, 64

 

Independent Lead Director

 

 

Director Since: October 2012

 

GS Committees

 

     Governance (Chair)

 

     Ex-officio member:

 

»   Audit

 

»   Compensation

 

»   Public Responsibilities

 

»    Risk

 

Other U.S.-Listed Company Directorships

 

    Current: Callaway Golf Company; Kosmos Energy Ltd.

 

     Former (Past 5 Years): None

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Strong leader, including leadership experience in the financial services industry: Founder, Chairman and Managing Partner of Global Infrastructure Partners and a former executive of Credit Suisse with over 20 years of experience in the financial services industry, including investment banking and private equity

 

    International business and global capital markets experience, including emerging markets: Advised and executed transactions and provided capital markets strategy advice globally

 

    Expertise regarding governance and compensation: Service on the boards of directors and board committees of other public companies and not-for-profit entities, and, in particular, as chair or former chair of the nominating and corporate governance committees at each of Callaway Golf and Kosmos Energy, provides additional governance perspective

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

   Chairman and Managing Partner, Global Infrastructure Partners, a private equity firm that invests worldwide in infrastructure assets in the energy, transport, water and waste industry sectors (July 2006 – Present)

 

    Credit Suisse, a financial services company

 

»   Executive Vice Chairman and Chief Client Officer (2004 – 2006)

 

»   Member of Executive Board and Management Committee (2002 – 2006)

 

»   Head of Global Investment Banking Department (2002 – 2004)

 

»   Head of Global Energy Group (1997 – 2002)

 

    Law Clerk to the Honorable Thurgood Marshall, Associate Justice of the U.S. Supreme Court (1980-1981)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Member, National Board of Directors, The NAACP Legal Defense and Educational Fund, Inc.

 

     Member, Board of Directors, Partnership for New York City Fund

 

     Member, Harvard University Global Advisory Council and Harvard Law School Leadership Council of New York

 

     Member, Board of Dean’s Advisors, Harvard Business School

 

 

EDUCATION

 

     Graduate of Oxford University, Harvard Business School and Harvard Law School

 

   

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        19


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 

 
 

LOGO

 

M. Michele Burns, 60

 

Independent

 

 

Director Since: October 2011

 

GS Committees

 

     Risk (Chair)*

 

     Compensation

 

    Governance

 

Other U.S.-Listed Company Directorships

 

     Current: Alexion Pharmaceuticals, Inc.
(retiring at 2018 annual meeting); Anheuser-Busch InBev; Cisco Systems, Inc.;
Etsy, Inc.

 

     Former (Past 5 Years):
Wal-Mart Stores, Inc.

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Leadership, risk, compensation and governance expertise: Leverages service on the boards of directors and board committees of other public companies and not-for-profit entities

 

     Human capital management and strategic consulting: Background gained as former CEO of Mercer LLC

 

     Accounting and the review and preparation of financial statements: Garnered expertise as former CFO of several global public companies

 
         
         
       

 

CAREER HIGHLIGHTS

 

     Chief Executive Officer, Retirement Policy Center, sponsored by Marsh & McLennan Companies, Inc. (MMC); Center focuses on retirement public policy issues (October 2011 – February 2014)

 

     Chairman and Chief Executive Officer, Mercer LLC, a subsidiary of MMC and a global leader in human resource consulting, outsourcing and investment services (September 2006 – early October 2011)

 

     Chief Financial Officer, MMC, a global professional services and consulting firm (March 2006 – September 2006)

 

     Chief Financial Officer, Chief Restructuring Officer and Executive Vice President, Mirant Corporation, an energy company (May 2004 – January 2006)

 

     Executive Vice President and Chief Financial Officer, Delta Air Lines, Inc., an air carrier (including various other positions, 1999 – April 2004)

 

     Senior Partner and Leader, Southern Regional Federal Tax Practice, Arthur Andersen LLP, an accounting firm (including various other positions, 1981 – 1999)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Center Fellow and Strategic Advisor, Stanford University Center on Longevity

 

     Board Member and Treasurer, Elton John AIDS Foundation

 

EDUCATION

 

     Graduate of University of Georgia (including for Masters)

 

 
 
 

LOGO

 

Mark A. Flaherty, 58

 

Independent

 

 

Director Since: December 2014

 

GS Committees

 

     Audit

 

    Governance

 

     Risk

 

Other U.S.-Listed Company Directorships

 

    Current: None

 

     Former (Past 5 Years): None

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Investment management: Leverages over 20 years of experience in the investment management industry, including at Wellington Management Company

 

     Perspective on institutional investors’ approach to company performance and
corporate governance
: Experience developed through his tenure at Wellington and Standish, Ayer and Wood

 

     Risk expertise: Draws upon years of experience in the financial industry

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

    Wellington Management Company, an investment management company

 

»   Vice Chairman (2011 – 2012)

 

»   Director of Global Investment Services (2002 – 2012)

 

»   Partner, Senior Vice President (2001 – 2012)

 

    Standish, Ayer and Wood, an investment management company

 

»   Executive Committee Member (1997 – 1999)

 

»   Partner (1994 – 1999)

 

»   Director, Global Equity Trading (1991 – 1999)

 

     Director, Global Equity Trading, Aetna, a diversified healthcare benefit company (1987 – 1991)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Member, Board of Trustees, The Newman School

 

    Member, Board of Directors, Boston Scholar Athletes

 

     Former Member, Board of Trustees, Providence College

 

EDUCATION

 

     Graduate of Providence College

 

   

 

*   Effective May 2, 2018, Ms. Burns will become the Chair of our Compensation Committee and Mr. Winkelman will become the Chair of our Risk Committee.

 

20        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 

 
 

LOGO

 

William W. George, 75

 

Independent

 

 

Director Since: December 2002

 

GS Committees

 

     Public Responsibilities (Chair)

 

     Compensation

 

    Governance

 

 

Other U.S.-Listed Company Directorships

 

     Current: None

 

     Former (Past 5 Years): Exxon Mobil Corporation

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Focus on reputation and ESG matters: Utilizes current and prior service on the boards of directors and board committees of several other public companies and not-for-profit entities, particularly as Chair of our Public Responsibilities Committee

 

    Leadership: Served as Chief Executive Officer and Chairman of Medtronic, Inc. and as a senior executive at Honeywell International Inc.

 

    Organizational behavior and management: A senior fellow and former professor of leadership and management practice at Harvard Business School and an author of several books on leadership, which provide academic expertise in business management and corporate governance

 

 
         
         
       

 

CAREER HIGHLIGHTS

 

     Harvard Business School

 

»   Senior Fellow (July 2014 – present)

 

»   Professor of Management Practice (January 2004 – July 2014)

 

     Medtronic, Inc., a medical technology company

 

»   Chairman (April 1996 – April 2002)

 

»   Chief Executive Officer (May 1991 – May 2001)

 

»   President and Chief Operating Officer (1989 – 1991)

 

     Executive Vice President, Honeywell International Inc., a diversified technology and manufacturing company (1978 – 1989)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Trustee, Mayo Clinic

 

    Member, National Academy of Engineering

 

EDUCATION

 

     Graduate of Georgia Institute of Technology and Harvard Business School

 

 
 
 

LOGO

 

James A. Johnson, 74

 

Independent

 

 

Director Since: May 1999

 

GS Committees

 

     Compensation (Chair)*

 

     Governance

 

    Public Responsibilities

 

Other U.S.-Listed Company Directorships

 

     Current: None

 

     Former (Past 5 Years): Forestar Group, Inc.;
Target Corporation

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Financial services, including investment management industry: Leverages professional experience in financial services

 

     Government affairs and the regulatory process: Experience developed through, among other things, his tenure at Fannie Mae and his work with Vice President Walter F. Mondale

 

     Leadership, compensation and governance: Current and prior service on the boards of directors of public companies and not-for-profit entities, including in lead director and committee chair roles, provides additional perspective

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

    Chairman, Johnson Capital Partners, a private consulting company (Present)

 

     Vice Chairman, Perseus L.L.C., a merchant banking and private equity firm (April 2001 – June 2012)

 

     Fannie Mae

 

»   Chairman of the Executive Committee (1999)

 

»   Chairman and Chief Executive Officer (February 1991 – 1998)

 

»   Vice Chairman (1990 – February 1991)

 

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Chairman Emeritus, John F. Kennedy Center for the Performing Arts and The Brookings Institution

 

     Member, International Council, The Belfer Center for Science and International Affairs, Harvard University

 

     Council Member, Smithsonian Museum of African American History and Culture

 

     Chair, Advisory Council, Stanford University Center on Longevity

 

     Member, Council on Foreign Relations

 

    Member, American Academy of Arts and Sciences

 

EDUCATION

 

     Graduate of University of Minnesota and the Woodrow Wilson School of Public and International Affairs, Princeton University

 

   

* Effective May 2, 2018, Ms. Burns will become the Chair of our Compensation Committee.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        21


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 

 
 

LOGO

 

Ellen J. Kullman, 62

 

Independent

 

 

Director Since: December 2016

 

GS Committees

 

     Compensation

 

    Governance

 

     Risk

 

Other U.S.-Listed Company Directorships

 

    Current: Amgen Inc.; Dell Technologies Inc.; United Technologies Corporation

 

     Former (Past 5 Years): E.I. du Pont de Nemours and Company

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

    Leadership and strategy: During her tenure as Chair and CEO of DuPont, a highly-regulated science and technology-based company with global operations, led the company through a period of strategic transformation and growth

 

     Corporate governance and compensation: Leverages service on the boards of directors and board committees (including in leadership roles) of other public companies and not-for-profit entities

 

     Risk management experience: Draws upon experiences gained from DuPont and other board roles to provide our Risk Committee with diverse viewpoints

 

 
         
         
       

 

CAREER HIGHLIGHTS

 

     E.I. du Pont de Nemours and Company, a provider of basic materials and innovative products and services for diverse industries

 

»   Chairman and Chief Executive Officer (2009 – 2015)

 

»   President (Oct. 2008 – Dec. 2008)

 

»   Executive Vice President, DuPont Coatings and Color Technologies, DuPont Electronic and Communication Technologies; DuPont Performance Materials, DuPont Safety and Protection, Marketing and Sales, Pharmaceuticals, Risk Management and Safety and Sustainability (2006 – 2008)

 

»   Various positions, including Group Vice President, DuPont Safety and Protection (1988 – 2006)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

    Member, Board of Overseers, Tufts University School of Engineering

 

     Trustee, Northwestern University

 

    Member, National Academy of Engineering

 

     Member, The Business Council

 

    Co-Chair, Paradigm for Parity

 

EDUCATION

 

     Graduate of Tufts University and Kellogg School of Management, Northwestern University

 

 
 
 

LOGO

 

Lakshmi N. Mittal, 67

 

Independent

 

 

Director Since: June 2008

 

GS Committees

 

     Compensation

 

    Governance

 

     Public Responsibilities

 

Other U.S.-Listed Company Directorships

 

     Former (Past 5 Years): None

 

 

     Current: ArcelorMittal S.A.

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Leadership, business development and operations: Founder of Mittal Steel Company and Chairman and Chief Executive Officer of ArcelorMittal S.A., the world’s leading integrated steel and mining company

 

     International business and growth markets: Leading company with operations in 18 countries on four continents provides global business expertise and perspective on public responsibilities

 

     Corporate governance and international governance: Current and prior service on the boards of directors of other international public companies and not-for-profit entities assists in committee responsibilities

 

 
         
         
       

 

CAREER HIGHLIGHTS

 

     ArcelorMittal S.A., a steel and mining company

 

»   Chairman and Chief Executive Officer (May 2008 – Present)

 

»   President and Chief Executive Officer (November 2006 – May 2008)

 

    Chief Executive Officer, Mittal Steel Company N.V. (1976 – November 2006)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Member, International Business Council of the World Economic Forum

 

     Trustee, Cleveland Clinic

 

    Member, Governing Board, Indian School of Business

 

     Member, European Round Table of Industrialists

 

    Chairman, Governing Council, LNM Institute of Information Technology

 

EDUCATION

 

     Graduate of St. Xavier’s College in India

 

 
                   

 

22        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 
 

LOGO

 

Peter Oppenheimer, 55

 

Independent

 

 

Director Since: March 2014

 

GS Committees

 

     Audit (Chair)

 

     Governance

 

    Risk

 

Other U.S.-Listed Company Directorships

 

     Current: None

 

     Former (Past 5 Years): None

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Capital and risk management: Garnered experience as CFO and Controller at Apple and Divisional CFO at ADP

 

     Review and preparation of financial statements: Over 20 years as a CFO or controller provides valuable experience and perspective as Audit Committee Chair

 

     Oversight of technology and technology risks: Leverages prior experience in overseeing information systems at Apple

 

 
         
         
       

 

CAREER HIGHLIGHTS

 

     Apple, Inc., a designer and manufacturer of electronic devices and related software and services

 

»   Senior Vice President (retired September 2014)

 

»   Senior Vice President and Chief Financial Officer (2004 – June 2014)

 

»   Senior Vice President and Corporate Controller (2002 – 2004)

 

»   Vice President and Corporate Controller (1998 – 2002)

 

»   Vice President and Controller, Worldwide Sales (1997 – 1998)

 

»   Senior Director, Finance and Controller, Americas (1996 – 1997)

 

    Divisional Chief Financial Officer, Finance, MIS, Administration and Equipment Leasing Portfolio at Automatic Data Processing, Inc. (ADP), a leading provider of human capital management and integrated computing solutions (1992 – 1996)

 

     Consultant, Information Technology Practice at Coopers & Lybrand, LLP (1988 – 1992)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Vice Chairman, Foundation Board of Directors, California Polytechnic State University

 

     Secretary, Community Board, French Hospital Medical Center

 

     Board Member, Pacific Coast Health Center

 

EDUCATION

 

     Graduate of California Polytechnic State University and the Leavey School of Business, University of Santa Clara

 

 

 
 

LOGO

 

David A. Viniar, 62

 

Non-Employee

 

 

Director Since: January 2013

 

GS Committees

 

   Risk

 

Other U.S.-Listed Company Directorships

 

   Current: Square, Inc.

 

   Former (Past 5 Years): None

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Financial industry, in particular risk management and regulatory affairs: Over 30 years of experience in various roles at Goldman Sachs, as well as service as chair of the audit and risk committee of Square, Inc., provides valuable perspective to our Board

 

    Unique insight into our firm’s financial reporting, controls and risk management: As our former CFO, able to provide unique insight about our risks to our Risk Committee

 

     Capital management processes and assessments: Experience gained through serving as Goldman Sachs’ CFO for over 10 years

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

   Goldman Sachs

 

»   Executive Vice President and Chief Financial Officer (May 1999 – January 2013)

 

»   Head of Operations, Technology, Finance and Services Division (December 2002 – January 2013)

 

»   Head of the Finance Division and Co-head of Credit Risk Management and Advisory and Firmwide Risk (December 2001 – December 2002)

 

»   Co-head of Operations, Finance and Resources (March 1999 – December 2001)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

    Trustee, Garden of Dreams Foundation

 

   Former Trustee, Union College

 

EDUCATION

 

    Graduate of Union College and Harvard Business School

 

   

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        23


Table of Contents

Corporate Governance | Item 1. Election of Directors

 

 
 

LOGO

 

Mark O. Winkelman, 71

 

Independent

 

 

Director Since: December 2014

 

GS Committees

 

   Audit

 

   Governance

 

   Risk*

 

Other U.S.-Listed Company Directorships

 

   Current: None

 

   Former (Past 5 Years): Anheuser-Busch InBev

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
           
       

 

     Knowledge about our firm, including our fixed income business, and an understanding of the risks we face: Utilizes his previous tenure at Goldman Sachs as well as his service on the board and experience in chairing the risk committee of our subsidiary, Goldman Sachs International

 

     Audit and financial expertise, corporate governance and leadership: Leverages prior service on the board of directors and the audit and finance committees of Anheuser-Busch InBev and service on the boards of directors and audit, finance and other committees of not-for-profit entities

 

     Financial services industry: Experience gained through his role as operating partner at J.C. Flowers and through other industry experience

 

 
         
         
             

 

CAREER HIGHLIGHTS

 

   Private investor (Present)

 

    Operating Partner, J.C. Flowers & Co., a private investment firm focusing on the financial services industry (2006 – 2008)

 

    Goldman Sachs

 

»   Retired Limited Partner (1994 – 1999)

 

»   Management Committee Member and Co-Head of Fixed Income Division (1987 – 1994)

 

»   Various positions at the firm, including Head of J. Aron Division (1978 – 1987)

 

   Senior Investment Officer, The World Bank (1974 – 1978)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

    Director and Risk Committee Chair, Goldman Sachs International

 

    Trustee, Penn Medicine

 

   Trustee Emeritus, University of Pennsylvania

 

EDUCATION

 

    Graduate of Erasmus University in the Netherlands and The Wharton School, University of Pennsylvania

 

   

* Effective May 2, 2018, Mr. Winkelman will become the Chair of our Risk Committee.

 

 

INDEPENDENCE OF DIRECTORS

 

 

  9 of our 11 director nominees are independent       
    
  Our Board determined, upon the recommendation of our Governance Committee, that Ms. Burns, Mr. Flaherty, Mr. George, Mr. Johnson, Ms. Kullman, Mr. Mittal, Mr. Ogunlesi, Mr. Oppenheimer and Mr. Winkelman are “independent” within the meaning of NYSE rules and our Director Independence Policy. Prior to their retirement from our Board in 2017, each of Debora Spar and Mark Tucker were also determined to be independent. Furthermore, our Board has determined that all of our independent directors satisfy the heightened audit committee independence standards under SEC and NYSE rules, and that Compensation Committee members also satisfy the relevant heightened standards under NYSE rules.

 

Process for Independence Assessment

A director is considered independent under NYSE rules if our Board determines that the director does not have any direct or indirect material relationship with Goldman Sachs. Our Board has established a Policy Regarding Director Independence (Director Independence Policy) that provides standards to assist our Board in determining which relationships and transactions might constitute a material relationship that would cause a director not to be independent.

To assess independence, our Governance Committee and our Board review detailed information regarding our independent directors, including employment and public company and not-for-profit directorships, as well as information regarding immediate family members and affiliated entities.

Through the course of this review, our Governance Committee and our Board consider relationships between the independent directors (and their immediate family members and affiliated entities) on the one hand, and Goldman Sachs and its affiliates on the other, in accordance with our Director Independence Policy. This includes a review of revenues to the firm from, and payments or donations made by us to, relevant entities affiliated with our directors (or their immediate family members) as a result of ordinary course transactions or contributions to not-for-profit organizations.

For more information on the categories of transactions that our Governance Committee and our Board reviewed, considered and determined to be immaterial under our Director Independence Policy, see Additional Details on Director Independence in Annex B.

 

24        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

Structure of our Board and Governance Practices

 

 

 

BOARD OF DIRECTORS

CHAIRMAN AND CEO: LLOYD BLANKFEIN; LEAD DIRECTOR: ADEBAYO OGUNLESI

 

 

         

 

AUDIT

COMMITTEE

   

 

COMPENSATION     

COMMITTEE     

   

 

GOVERNANCE     

COMMITTEE     

   

 

PUBLIC      RESPONSIBILITIES      COMMITTEE     

   

 

RISK     

COMMITTEE     

3 Members:

All Independent

 

   

5 Members:     

All Independent     

 

   

9 Members:     

All Independent     

 

   

3 Members:     

All Independent     

 

   

6 Members:     

5 Independent     

 

 

 

OUR BOARD COMMITTEES

 

 

Our Board has five standing Committees: Audit, Compensation, Governance, Public Responsibilities and Risk. The specific membership of each Committee allows us to take advantage of our directors’ diverse skill sets, which enables deep focus on Committee matters.

Each of our Committees:

 

    Operates pursuant to a written charter (available on our website at www.gs.com/charters)

 

    Evaluates its performance annually

 

    Reviews its charter annually

 

 

The firm’s reputation is of critical importance. In fulfilling their duties and responsibilities, each of our standing Committees and our Board consider the potential effect of any matter on our reputation.

 

 

 

 

    AUDIT

 

         

 

    ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

 

  

 

 

KEY RESPONSIBILITIES

 

Peter Oppenheimer*

Mark Flaherty

Mark Winkelman

 

Adebayo Ogunlesi

(ex-officio)

  

 

    Audit/Tax/Accounting

 

     Preparation or oversight of financial statements

 

     Compliance

 

  

 

    Assist our Board in its oversight of our financial statements, legal and regulatory compliance, independent auditors’ qualification, independence and performance, internal audit function performance and internal controls over financial reporting

 

     Decide whether to appoint, retain or terminate our independent auditors

 

     Pre-approve all audit, audit-related, tax and other services, if any, to be provided by the independent auditors

 

     Appoint and oversee the work of our Director of Internal Audit and annually assess her performance and administrative reporting line

 

     Prepare the Audit Committee Report

 

 

* A majority of the members of our Audit Committee, including the Chair, have been determined to be “audit committee financial experts.”

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        25


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

    COMPENSATION

 

         

 

    ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

 

  

 

KEY RESPONSIBILITIES

James Johnson**

Michele Burns

William George

Ellen Kullman

Lakshmi Mittal

 

Adebayo Ogunlesi

(ex-officio)

  

     Setting of executive compensation

 

    Evaluation of executive and firmwide compensation programs

 

     Human capital management, including diversity

  

     Determine and approve the compensation of our CEO and other executive officers

 

     Approve, or make recommendations to our Board for it to approve, our incentive, equity-based and other compensation plans

 

     Assist our Board in its oversight of the development, implementation and effectiveness of our policies and strategies relating to our human capital management function, including:

 

»   recruiting;

 

»   retention;

 

»   career development and progression;

 

»   management succession (other than that within the purview of our Governance Committee); and

 

»   diversity and employment practices

 

     Prepare the Compensation Committee Report

 

 

 

    GOVERNANCE

 

         

 

    ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

 

  

 

KEY RESPONSIBILITIES

Adebayo Ogunlesi

Michele Burns

Mark Flaherty

William George

Ellen Kullman

James Johnson

Lakshmi Mittal

Peter Oppenheimer

Mark Winkelman

  

     Corporate governance

 

    Talent development and succession planning

 

     Current and prior public company board service

  

     Recommend individuals to our Board for nomination, election or appointment as members of our Board and its Committees

 

     Oversee the evaluation of the performance of our Board and our CEO

 

     Review and concur with the succession plans for our CEO and other members of senior management

 

     Take a leadership role in shaping our corporate governance, including developing, recommending to our Board and reviewing on an ongoing basis the corporate governance principles and practices that apply to us

 

     Review periodically the form and amount of non-employee director compensation and make recommendations to our Board with respect thereto

 

 

 

    PUBLIC RESPONSIBILITIES

 

    

 

    ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

 

  

 

KEY RESPONSIBILITIES

William George

James Johnson

Lakshmi Mittal

 

Adebayo Ogunlesi

(ex-officio)

  

     Reputational risk

 

    ESG

 

     Government and regulatory affairs

 

    Philanthropy

  

     Assist our Board in its oversight of our firm’s relationships with major external constituencies and our reputation

 

     Oversee the development, implementation and effectiveness of our policies and strategies relating to citizenship, corporate engagement and relevant significant public policy issues

 

     Review ESG issues affecting our firm, including through the periodic review of the ESG report

 

 

 

    RISK

 

    

 

    MAJORITY
    INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

 

  

 

KEY RESPONSIBILITIES

Michele Burns**

Mark Flaherty

Ellen Kullman

Peter Oppenheimer

Mark Winkelman

 

Adebayo Ogunlesi

(ex-officio)

 

Non-independent

David Viniar

  

     Understanding of how risk is undertaken, mitigated and controlled in complex industries

 

     Technology

 

    Understanding of financial products

 

     Expertise in capital adequacy and deployment

  

     Assist our Board in its oversight of our firm’s overall risk-taking tolerance and management of financial and operational risks, such as market, credit and liquidity risk, including reviewing and discussing with management:

 

»   our firm’s capital plan, regulatory capital ratios, capital management policy and internal capital adequacy assessment process and the effectiveness of our financial and operational risk management policies and controls;

 

»   our liquidity risk metrics, management, funding strategies and controls, and the contingency funding plan; and

 

»   our market, credit, operational and model risk management strategies, policies and controls

** Effective May 2, 2018, Ms. Burns will become the Chair of our Compensation Committee and Mr. Winkelman will become the Chair of our Risk Committee.

 

26        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

 

 

BOARD AND COMMITTEE EVALUATIONS

 

 

Board and Committee evaluations play a critical role in ensuring the effective functioning of our Board. It is important to take stock of Board, Committee and director performance and to solicit and act upon feedback received from each member of our Board. To this end, under the leadership of our Lead Director, our Governance Committee is responsible for evaluating the performance of our Board annually, and each of our Board’s Committees also annually conducts a self-evaluation.

 

 

LOGO

 

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        27

REVIEW OF EVALUATION PROCESS Our Lead Director and Governance Committee periodically review the evaluation process to ensure that actionable feedback is solicited on the operation of our Board and its Committees, as well as on director performance Over the last several years, we have refined the format of the questionnaire and added specific evaluations of the Lead Director, each Committee Chair and each individual director QUESTIONNAIRE Provides director feedback on an unattributed basis Feedback from questionnaire informs one-on-one and closed session discussions ONGOING FEEDBACK Directors provide ongoing, real-time feedback outside of the evaluation process Lines of communication between our directors and management are always open 2017 Evaluations A Multi-Step Process ONE-ON-ONE DISCUSSIONS One-on-one discussions between our Lead Director and each non-employee director Provides further opportunity for candid discussion to solicit additional feedback as well as to provide individual feedback. Feedback on Lead Director performance provided to him by the Secretary to our Board FEEDBACK INCORPORATED Policies and practices updated as appropriate as a result of the annual and ongoing feedback Examples include changes to Committee structure, additional presentations on various topics, refinements to meeting materials and presentation format and additional Audit and Risk Committee meetings EVALUATION SUMMARY Summary of Board and Committee evaluations results provided to full Board CLOSED SESSION Closed session discussion of Board and Committee evaluations led by our Lead Director and independent Committee Chairs Joint discussion across our Committees provides for a synergistic review of Board and Committee performance


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

    TOPICS CONSIDERED DURING THE BOARD AND COMMITTEE EVALUATIONS INCLUDE:

 

    

        DIRECTOR

        PERFORMANCE

   BOARD AND COMMITTEE
OPERATIONS
  

BOARD

PERFORMANCE

  

COMMITTEE

PERFORMANCE

 

 

    Individual director performance

 

     Lead Director
(in that role)

 

    Each Committee Chair
(in that role)

  

 

    Board and Committee membership, including director skills, background, expertise and diversity

 

     Committee structure, including whether the Committee structure enhances Board and Committee performance

 

     Access to firm personnel

 

    Conduct of meetings, including time allocated for, and encouragement of, candid dialogue

 

     Materials and information, including quality and quantity of information received from management, and suggestions for educational sessions

 

     Shareholder feedback

  

 

    Key areas of focus for the Board

 

     Consideration of reputation

 

    Strategy oversight

 

     Consideration of shareholder value

 

    Capital planning

  

 

    Performance of Committee duties under Committee charters

 

     Consideration of reputation and shareholder value

 

     Effectiveness of outside advisers

 

    Identification of topics that should receive more attention and discussion

 

 

 

BOARD LEADERSHIP STRUCTURE

 

 

Annual Assessment of Board Leadership Structure

Our Board does not have a policy as to whether the roles of Chairman and CEO should be separate or combined. Our Governance Committee annually assesses these roles and deliberates the merits of our Board’s leadership structure to ensure that the most efficient and appropriate structure is in place for our firm’s needs, which may evolve over time. If at any time the Chairman is not an independent director, our independent directors will appoint an independent Lead Director.

 

 

KEY COMPONENTS OF ANNUAL REVIEW

 

                                      

CHAIRMAN-CEO

AND LEAD

DIRECTOR RESPONSIBILITIES

 

 

LOGO

 

 

OUR POLICIES AND PRACTICES TO
ENSURE STRONG
INDEPENDENT

BOARD OVERSIGHT

 

 

LOGO

 

 

SHAREHOLDER

FEEDBACK AND
VOTING RESULTS
REGARDING

BOARD

LEADERSHIP

 

 

LOGO

  FIRM
PERFORMANCE
 

 

LOGO

  GLOBAL TRENDS
REGARDING
LEADERSHIP
STRUCTURE
                                      

 

28        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

 

Our Current Board Leadership Structure

 

 

As a result of its most recent Board leadership review in December 2017, which included feedback from our shareholders, our Governance Committee determined that continuing to combine the roles of Chairman and CEO is the most effective leadership structure for our Board and our firm at this time.

 

 

Among other reasons:

 

 

KEY PILLARS

OF THE LEAD

DIRECTOR ROLE

 

 

 

  Our Board leadership structure is enhanced by the independent leadership provided by our Lead Director and independent Committee Chairs, the independence of our Board and the governance policies and practices in place at our firm. For example:

   
         

»  Our independent Lead Director has an expansive list of enumerated duties, including setting the Board agenda (working with the Chairman), and is focused on shareholder engagement

 

Sets and approves

agenda for Board

meetings and leads

executive sessions

 

 

 

»  Our Chairman and CEO and our Lead Director meet and speak with each other regularly about our Board and our firm

   
         

»  Our independent Committee Chairs meet and speak regularly with each other between meetings and with members of our management as well as non-management employees

 

Focuses on Board effectiveness,

composition and

conducting evaluations

 

 

 

  A combined Chairman-CEO structure provides our firm with a senior leader who serves as a primary liaison between our Board and management, and as the primary public face of our firm

   
         

»  This structure demonstrates clear accountability to our shareholders, clients and others

 

 

Serves as liaison

between independent directors and

Chairman/management  

 

 

 

  Our CEO has extensive knowledge of all aspects of our current business, operations and risks, which he brings to Board discussions as Chairman

   
         

» A combined Chairman-CEO can serve as a knowledgeable resource for our independent directors both at and between Board meetings

 

»  Combining the roles at our firm has been effective in promulgating a strong and effective leader of the firm, particularly in times of economic challenge and regulatory change affecting our industry

 

 

Acts as primary

Board contact

for shareholder 

engagement

and engages

with regulators

 

 

 

If at any time our Governance Committee determines it would be appropriate to appoint an Independent Chairman, it will not hesitate to do so.

 

 
   

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        29


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

 

 

 

Key responsibilities

 

of our Chairman-CEO    

 

           

 

 

Powers and duties of our

 

Independent Lead Director    

 

    
                  
 

 

   Chairs Board meetings

 

    Chairs annual shareholder meeting

 

   Serves as the public face of our Board and our firm

 

    Provides input to Lead Director on agenda for Board meetings (which the Lead Director approves) and reviews schedule for Board meetings

 

    Guides discussions at Board meetings and encourages directors to voice their views

 

    Serves as a resource for our Board

 

   Communicates significant business developments and time-sensitive matters to our Board

 

    Establishes the “tone at the top” in coordination with our Board, and embodies these values for our firm

 

    Responsible for managing the day-to-day business and affairs of our firm

 

    Sets and leads the implementation of corporate policy and strategy

 

    Interacts regularly with our COOs, CFO and other senior leadership of our firm

 

    Manages senior leadership of our firm

 

   Meets frequently with clients and shareholders, providing an opportunity to understand and respond to concerns and feedback; communicates feedback to our Board

       

 

   Provides independent leadership

 

    Sets agenda for Board meetings, working with our Chairman (including adding items to and approving the agenda), and approves the form and type of related materials; approves the schedule for Board and Committee meetings; sets agenda and approves materials for Governance Committee meetings; approves agenda for other Committee meetings (along with our other independent Committee Chairs, who also approve the materials for these meetings)

 

    Engages with our other independent directors to identify matters for discussion at executive sessions of independent directors

 

    Presides at executive sessions of independent directors

 

    Advises our Chairman of any decisions reached and suggestions made at the executive sessions, as appropriate

 

    Calls meetings of the independent directors

 

   Presides at any Board meeting at which the Chairman is not present

 

    Facilitates communication between the independent directors and our Chairman, including by presenting our Chairman’s views, concerns and issues to the independent directors and raising to our Chairman, as appropriate, views, concerns and issues of the independent directors

 

   Engages with our Chairman between Board meetings and assists with informing or engaging non-employee directors, as appropriate

 

   Engages with each non-employee director separately regarding the performance and functioning of the collective Board, individual director performance and other matters as appropriate

 

    Oversees our Board’s governance processes, including Board evaluations, succession planning and other governance-related matters

 

    Leads the annual CEO evaluation

 

   Meets directly with management and non-management employees of our firm

 

    Consults and directly communicates with shareholders and other key constituents, as appropriate

 

 

 

 

30        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

 

     YEAR-ROUND REVIEW OF BOARD COMPOSITION

 

 

 

 

Our Governance Committee seeks to build and maintain an effective,        

 

well-rounded, financially literate and diverse Board that operates in

 

an atmosphere of candor and collaboration.

 

 
   
         
   
 

 

In identifying and recommending director candidates, our Governance Committee places primary emphasis on the criteria set forth in our Corporate Governance Guidelines, including:

 

 

  Judgment, character, expertise, skills and knowledge useful to the oversight of our business;

 

 

  Diversity of viewpoints, backgrounds, experiences and other demographics;

 

 

  Business or other relevant experience; and

 

 

  The extent to which the interplay of the candidate’s expertise, skills, knowledge and experience with that of other members of our Board will build a strong and effective Board that is collegial and responsive to the needs of our firm.

 

Board Process for Identification and Review of Director Candidates to Join Our Board

 

LOGO

Identifying and recommending individuals for nomination, election or re-election to our Board is a principal responsibility of our Governance Committee. The Committee carries out this function through an ongoing, year-round process, which includes the Committee’s annual evaluation of our Board and individual director evaluations. Each director and director candidate is evaluated by our Governance Committee based on his or her individual merits, taking into account our firm’s needs and the composition of our Board.

To assist in this evaluation, the Committee utilizes as a discussion tool a matrix of certain skills and experiences that would be beneficial to have represented on our Board and on our Committees at any particular point in time. For example, the Committee is focused on what skills are beneficial for service in key Board positions, such as Lead Director and Committee Chairs, and conducts a succession planning process for those positions.

Our Governance Committee welcomes candidates recommended by shareholders and will consider these candidates in the same manner as other candidates. Shareholders wishing to submit potential director candidates for consideration by our Governance Committee should follow the instructions in Frequently Asked Questions.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        31

INDEPENDENT DIRECTORS CANDIDATE POOL IN-DEPTH REVIEW RECOMMEND SELECTED CANDIDATES FOR APPOINTMENT TO OUR BOARD RESULTS Screen Qualifications SHAREHOLDERS Consider Diversity Review Independence and Potential Conflicts INDEPENDENT SEARCH FIRMS Meet with Directors Consider Skills/Matrix OUR PEOPLE 5 DIRECTORS JOINED 2013-2018


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

 

 

     DIRECTOR EDUCATION

 

Director education about our firm and our industry is an ongoing process, which begins when a director joins our Board.

Upon joining our Board, new directors are provided with a comprehensive orientation about our firm, including our business, strategy and governance. For example, new directors typically meet with senior leaders covering each of our divisions and regions, as well as with senior leaders from key control-side functions.

New directors will also undergo in-depth training on the work of each of our Board’s Committees, such as an Audit and Risk Committee orientation session with our CFO, Controller, Treasurer and CRO, as well as a session with the Director of Internal Audit. Additional training is also provided when a director assumes a leadership role, such as becoming a Committee Chair.

Board and Committee presentations, roundtables, regular communications and firm and other industry events help to keep directors appropriately apprised of key developments in our businesses and in our industry, including material changes in regulation, so that they can carry out their oversight responsibilities.

 

 

     COMMITMENT OF OUR BOARD

 

Commitment of our Directors—2017 Meetings

Our Board and its Committees met frequently in 2017.

 

    

 

2017         
MEETINGS         

 

 

 

100

 

 

 

 

 

Board

 

 

  

 

 

13         

 

 

 

 

 

 

LOGO

 

 

 

 

 

Audit

 

 

  

 

14         

 

 

 

 

 

 

Compensation

 

 

  

 

7         

 

 

 

 

 

 

Governance

 

 

  

 

6         

 

 

 

 

 

 

Public Responsibilities

 

 

  

 

6         

 

 

 

 

 

 

Risk

 

 

  

 

8         

 

 

 

 

 

 

Executive Sessions of Independent Directors without Management*

 

 

  

 

5         

 

 

 

 

 

 

Additional Executive Sessions of Non-Employee Directors without Management**

 

 

  

 

18         

 

 

 

 

* Chaired by our Lead Director.
** Led by our independent Committee Chairs.

Each of our current directors attended over 75% (the threshold for disclosure under SEC rules) of the meetings of our Board and the Committees on which he or she served as a regular member during 2017. Overall attendance at Board and Committee meetings during 2017 was over 98% for our current directors as a group.

We encourage our directors to attend our annual meetings. All of our current directors attended the 2017 Annual Meeting other than Mr. Johnson, who was unable to attend in person due to illness but listened to the meeting by phone.

 

32        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

54 TOTAL BOARD AND COMMITTEE MEETINGS IN 2017


Table of Contents

Corporate Governance | Structure of our Board and Governance Practices

 

Commitment of our Directors – Beyond the Boardroom

 

 

 

Engagement beyond the boardroom provides our directors with additional insights into our businesses, risk management and industry, as well as valuable perspectives on the performance of our firm, our CEO and other members of senior management.

 

 

 
   
        
 

 

The commitment of our directors extends well beyond preparation for, and attendance at, regular and special meetings.

 

 

    

 

 

 

 

 

 

ONGOING INTERACTIONS

Frequent interactions with each

other, senior management and

key employees around the globe

on topics including strategy,

performance, risk management,

culture and talent development

 

 

 

CONSTITUENT ENGAGEMENT

Regular engagement with

key constituents, including

regulators, and for our Lead Director, engagement with our

shareholders. Participation

in firm and industry conferences

and other events on behalf

of the Board

 

 

 

 

REGULARLY INFORMED

Receive postings on significant

developments and weekly informational packages that include updates on recent developments, press coverage and current events

that relate to our business,

our people and our industry

 

   
   

 

Our Lead Director and Committee Chairs provide additional independent leadership outside the boardroom.

 

  For example, each Chair sets the agenda for his or her respective Committee meetings, and reviews and provides feedback on the form and type of related materials, in each case taking into account whether their Committee is appropriately carrying out its core responsibilities and focusing on the key issues facing the firm, as may be applicable from time to time. To do so, each Chair engages with key members of management and subject matter experts in advance of each Committee meeting.

 

  In addition, our Lead Director also sets the Board agenda (working with our Chairman) and approves the form and type of related materials. Our Lead Director also approves the schedule of Board and Committee meetings, taking into account whether there is sufficient time for discussion of all agenda items at the Board and each Committee meeting.

 

In carrying out their leadership roles during 2017:

 

 

      

 

Adebayo Ogunlesi

Lead Director

 

 

 

Michele Burns

Risk Chair

 

 

 

Bill George

Public Responsibilities Chair

 

 

 

James Johnson

Compensation Chair

 

 

 

Peter Oppenheimer

Audit Chair

 

 
   

 

Over 95 meetings

 

Includes meetings with:

CEO, Co-COOs,

Secretary to the Board,

General Counsel,

Shareholders,

Regulators, Independent

Director Compensation

Consultant, Director

Search Firm

 

 

 

Over 45 meetings

 

Includes meetings with:

Co-COOs, CFO,

Secretary to the Board,

General Counsel, CRO,

Controller, Treasurer,

Director of Internal Audit,

Regulators, other key risk

management employees

 

 

 

Over 15 meetings

 

Includes meetings with:

CEO, Co-COOs,

Secretary to the Board,

General Counsel,

key members of our

executive office

 

 

 

Over 35 meetings

 

Includes meetings with:

Co-COOs, CFO,

Secretary to the Board,

General Counsel, Global

Head of Reward, Global

Head of Executive

Compensation,

Independent

Compensation

Consultant, Regulators

 

 

 

Over 65 meetings

 

Includes meetings with:

Co-COOs, CFO,

Secretary to the Board,

General Counsel, CRO,

Controller, Treasurer,

Director of Internal

Audit, Head of Global

Compliance and other key

compliance employees,

Chief Information Officer,

Regulators, Independent

Auditors

 

       
               

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        33


Table of Contents

Corporate Governance | Board Oversight of our Firm

 

Board Oversight of our Firm

 

 

  KEY AREAS OF BOARD OVERSIGHT

 

Our Board is responsible for, and committed to, the oversight of the business and affairs of our firm. In carrying out this responsibility, our Board advises our senior management to help drive success for our clients and long-term value creation for our shareholders, and oversees management’s efforts to ensure that the firm’s cultural expectations are appropriately communicated and embraced throughout the firm. Our Board discusses and receives regular updates on a wide variety of matters affecting our firm.

 

 

LOGO

 

       Strategy       
     
 

 

  Our Board oversees and provides advice and guidance to senior management on the formulation and implementation of the firm’s strategic plans

 

»  This occurs year-round through presentations and discussions covering firmwide, divisional and regional strategy, as well as growth initiatives, both during and outside Board meetings

 

  Our Board’s focus on overseeing risk management enhances our directors’ ability to provide insight and feedback to senior management, and if necessary to challenge management, on its development and implementation of the firm’s strategic direction

 

  Our Lead Director helps facilitate our Board’s oversight of strategy by ensuring that directors receive adequate information about strategy and by discussing strategy with independent directors at executive sessions

 

 

 

  CEO Performance      
     
 

 

  Under the direction of our Lead Director, our Governance Committee annually evaluates Mr. Blankfein’s performance

 

»  The evaluation process includes an executive session of independent directors, a closed session with Mr. Blankfein and additional discussion between our Lead Director and Mr. Blankfein throughout the year

 

  The Committee reviews the results of Mr. Blankfein’s evaluation under our “360 degree” review process (360° Review Process, as described further on page 42) and also assesses Mr. Blankfein’s performance both as CEO and as Chairman of the Board against the key criteria and responsibilities for these roles that were developed by our Governance Committee

 

 

 

34        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

Strategy CEO Performance Risk Management Executive Succession Planning Financial Performance and Reporting Culture and Conduct CONSIDERATION OF OUR REPUTATION IS CENTRAL TO BOARD AND COMMITTEE OVERSIGHT


Table of Contents

Corporate Governance | Board Oversight of our Firm

 

 

    Risk Management              

    

               
   

 

In the normal course, our firm commits capital and otherwise incurs risk as an inherent part of serving our clients’ needs. Our intention is to manage risks, or where possible, to mitigate them to such an extent that they could not, individually or collectively, materially and adversely affect our firm, including our capital and liquidity position, our ability to generate revenues, even in a stressed environment, and our reputation.

 

Management is responsible for the day-to-day assessment, identification, monitoring and decision-making regarding the risks we face. Our Board is responsible for overseeing the management of the firm’s most significant risks on an enterprise-wide basis. This oversight is executed by our full Board as well as each of its Committees, in particular our Risk Committee, and is carried out in conjunction with the Board’s oversight of firm strategy.

 

 

 

 
   

 

BOARD RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Strategic and financial considerations

 

  Legal, regulatory, reputational and compliance risks

 

  Other risks considered by Committees

 

   

 

LOGO

 
               
   

 

RISK COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Overall risk-taking tolerance and risk governance, including our Enterprise Risk Management Framework

 

  Our Risk Appetite Statement (in coordination with our full Board)

 

  Liquidity, market, credit, operational and model risks

 

  Our Capital Plan, capital ratios and capital adequacy

 

  Technology and cybersecurity risks, including oversight of management’s processes, monitoring and controls related thereto

 

     
               
   

 

PUBLIC RESPONSIBILITIES COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Brand and reputational risk, including client and business standards considerations, as well as the receipt of reports regarding the Firmwide Reputational Risk Committee regarding certain transactions that may present heightened reputational risk

 

  ESG risk

 

   

 

COMPENSATION COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Firmwide compensation program and policies that are consistent with the safety and soundness of our firm and do not raise risks reasonably likely to have a material adverse effect on our firm

 

  Jointly with our Risk Committee, annual CRO compensation-related risk assessment (see page 48)

 

     
               
   

 

AUDIT COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

   Financial, legal and compliance risk, in coordination with our full Board

 

   Coordination with our Risk Committee, including with respect to our risk assessment and risk management practices

 

   

 

GOVERNANCE COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Board composition and Board and executive succession

     
               

 

REPUTATIONAL RISK MANAGEMENT

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        35


Table of Contents

Corporate Governance | Board Oversight of our Firm

 

 

  Executive Succession Planning      
     
 

 

Our Governance Committee has adopted a framework relating to executive succession planning, under which the Committee has defined specific criteria for, and responsibilities of, each of the CEO, COO and CFO roles. The Committee then focuses on the particular skill set needed to succeed in these roles at our firm

 

 Our Lead Director also meets on this topic separately with our CEO and facilitates additional discussions with our independent directors about executive succession planning throughout the year, including at executive sessions

 

 

 

LOGO

 

 

  Financial Performance and Reporting    
   
 

 

  Our Board, including through its Committees, is kept apprised by management, on an ongoing basis, of the firm’s financial performance and key drivers thereof. For example, our Board generally receives an update on financial performance from our CFO at each meeting, which provides critical information to the Board and its Committees that assists them in carrying out their responsibilities

 

  Our Board, through its Audit Committee, is responsible for overseeing management’s preparation and presentation of our annual and quarterly financial statements and the effectiveness of our internal control over financial reporting

 

»  Each quarter, our Audit Committee meets with members of our management, the Director of Internal Audit and our independent registered public accounting firm to review and discuss our financial statements, as well as our quarterly earnings release

 

  In addition, our Audit Committee is directly responsible for overseeing the independence, performance and compensation of our independent registered public accounting firm. In this regard, our Audit Committee and Audit Committee Chair are directly involved with the periodic selection of the lead engagement partner (see Audit Matters—Item 4. Ratification of PwC as our Independent Registered Public Accounting Firm for 2018)

 

 

  Culture and Conduct    
   
 

 

 Oversight of the firm’s culture is an important element of our Board’s and Committees’ oversight of the firm’s reputation, particularly because our people are our greatest asset

 

 Our culture and the conduct we expect from our people is embedded in, and stems from, our Business Principles and our Code of Business Conduct and Ethics (which are available on www.gs.com)

 

 Our Board sets the “tone at the top,” and holds senior management accountable for embodying, maintaining and communicating a culture that emphasizes the importance of compliance with both the letter and spirit of the laws, rules and regulations that govern us

 

 This is carried out at our Board and across our Committees through a variety of means, including oversight of strategy, the receipt of metrics (such as with respect to conduct and business integrity matters, voluntary attrition and complaints, if any, in the retail consumer business), regular discussions with the firm’s Compliance, Legal, Risk and Audit functions, oversight of CEO and senior management performance and compensation (as described in Executive Compensation—Compensation Discussion and Analysis), and discussion of “lessons learned” from firm or industry events, as appropriate

 

 Recent firm initiatives include the launch of a “Chairman‘s Forum” on conduct, culture and reputational risk management (in which members of the Public Responsibilities Committee also participated), adoption of an enhanced Conduct Risk Framework and additional training as well as ongoing engagement with our regulators and other stakeholders regarding culture and conduct

 

 

36        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

Observation of senior management in a variety of settings, including Board meetings, preparatory meetings, during visits to our offices around the world and client-related events Plan reviewed by our Governance Committee with our CEO at least annually, with an update mid-year ALWAYS PREPARED TO APPOINT EXECUTIVES FROM WITHIN OUR FIRM Monitoring of senior management careers to ensure appropriate exposure to our Board and our business Review of senior management summaries (including 360° evaluations) and assessment of potential for executive positions


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Compensation Matters

Compensation Discussion and Analysis

 

 

2017 NEO COMPENSATION DETERMINATIONS

 

The following table shows our Compensation Committee’s determinations regarding our NEOs’ 2017 annual compensation (dollar amounts shown in millions). This table is different from the SEC-required 2017 Summary Compensation Table on page 58.

 

 

NAME AND
PRINCIPAL
POSITION

 

 

YEAR    

 

 

SALARY/

FIXED

ALLOWANCE*    
($)

 

 

ANNUAL VARIABLE COMPENSATION    

($)

 

 

 

TOTAL    
($)    

     

 

    EQUITY-BASED    

    AWARDS AS    

    % OF ANNUAL    
    VARIABLE    
    COMP.    

 

 

    EQUITY-    
    BASED    

    AWARDS AS    
    % OF TOTAL    

     

 

CASH    

 

 

PSUS*    

 

 

RSUS/    
RESTRICTED    
STOCK*    

         

 

EXECUTIVE LEADERSHIP TEAM

 

                   

Lloyd C. Blankfein

Chairman and CEO

 

  2017       2.00   4.40   17.60     24.00         80   73
                   

David M. Solomon

President and Co-COO

 

  2017       1.85   5.75   13.41     21.00         70   64
                   

Harvey M. Schwartz (retiring)

President and Co-COO

 

  2017       1.85   5.75   13.41     21.00         70   64

 

R. Martin Chavez

Executive Vice

President and CFO

 

  2017       1.73   5.18   12.09     19.00         70   64

 

VICE CHAIRMEN

 

                   

Richard J. Gnodde

Vice Chairman

 

  2017       1.85/8.15**         9.00***   19.00         100   63
                   

Pablo J. Salame

Vice Chairman

 

  2017       1.85   3.80        8.86   14.50         70   61

Note: Mr. Chavez became our CFO in May 2017. Prior to that time, Mr. Schwartz served as our CFO. Mr. Schwartz will be retiring from the firm on April 20, 2018. For reference, 2016 annual compensation for Messrs. Blankfein and Schwartz was $22.0 million and $20.0 million, respectively.

 

* The number of PSUs, RSUs and shares of restricted stock awarded as part of our NEOs’ 2017 annual compensation was determined by reference to the closing price of our Common Stock on the grant date ($250.97 on January 18, 2018). This resulted in grants as follows: Mr. Blankfein – 70,128 PSUs; Mr. Solomon – 53,413 PSUs; Mr. Schwartz – 53,413 PSUs; Mr. Chavez – 48,160 PSUs; Mr. Gnodde – 11,974 RSUs (in respect of his fixed allowance) and 37,985 RSUs (in respect of his variable compensation); and Mr. Salame – 35,284 shares of restricted stock. (For additional information regarding Mr. Gnodde’s grant, see the third footnote.)

 

** For 2017, Mr. Gnodde, who is based in the U.K., received a cash salary of $1.85 million and a fixed allowance of $8.15 million, payable approximately 37% in equity-based awards (as described in the preceding footnote), with the remainder in cash. Mr. Gnodde received a higher level of fixed compensation than our U.S.-based NEOs as a result of applicable U.K. regulations. See page 50 for more details.

 

*** Generally, RSU grants to our employees include a right to receive dividend equivalent payments. However, under applicable U.K. regulations, RSUs granted to Mr. Gnodde and certain other U.K. employees in respect of their variable compensation cannot include this right and therefore do not have the same value as awards granted to our other employees. To make up for this relative loss in value, affected U.K. employees received additional RSUs (Additional RSUs). In this regard, Mr. Gnodde received 2,124 Additional RSUs (which are reflected in the amounts described in the first footnote). See page 52 for more detail regarding the terms of these Additional RSUs.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        37


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Say on Pay & Shareholder Engagement

 

 

LOGO

    2016 Say on Pay Process and Streamlined Compensation Program. Following our 2016 Say on Pay Vote, our Compensation Committee requested that we engage in extensive shareholder outreach to discuss feedback on our executive compensation program. This process helped inform several changes to streamline the program’s structure.

 

    2017 Say on Pay Results. Our 2017 Say on Pay Vote received the support of approximately 93% of our shareholders. The Committee viewed this outcome as an indication of our shareholders’ predominantly positive reaction to the streamlined program.

 

    Extensive Shareholder Engagement. Although the outcome of our 2017 Say on Pay Vote was positive, the Committee nevertheless continues to view stakeholder feedback as a critical data point in evaluating and structuring our executive compensation program.

 

  »   In 2017, we (including, in certain cases, our Lead Director) met with shareholders representing approximately 40% of Common Stock outstanding to discuss compensation-related matters and other areas of focus for our shareholders.

 

    Ongoing Evaluation and Assessment. Following our 2017 Annual Meeting and throughout the fall and winter, the Committee continued to review our executive compensation program in light of a number of factors, including stakeholder feedback, input from the Committee’s independent compensation consultant, a review of public company practices and legal and regulatory developments (such as U.S. Tax Legislation).

 

  »   Ultimately, given the predominantly positive feedback received through shareholder engagement and the results of our 2017 Say on Pay vote, the Committee determined that the 2017 executive compensation program should remain largely consistent with the 2016 program.

 

KEY RECENT ENHANCEMENTS

(MADE FOR 2016 COMPENSATION)

 

Compensation structure streamlined; overlapping performance metrics eliminated

 

LTIP grants discontinued

 

PSUs redesigned to add relative ROE component

 

Significant increase in proportion of CEO’s annual variable compensation tied to ongoing performance metrics (80% in 2016 compared to 35% in 2015)

 

 

LOGO

 

 

KEY STAKEHOLDER FEEDBACK

(RECEIVED DURING 2017 PROXY SEASON ENGAGEMENT)

 

 Support for streamlined compensation structure

 

 Approval of increased proportion of PSUs in CEO/CFO pay

 

 Desire for greater detail on Committee’s approach in setting PSU thresholds and peer group

 

 Appreciation of commitment to shareholder engagement and response to feedback

 

 Endorsement of continued focus on alignment of pay and performance

 

 Focus on dilution and equity grant practices

 

 

LOGO

 

 

KEY 2017 COMPENSATION-RELATED FEATURES

 

For the first time, equity-based annual compensation for our entire Executive Leadership Team paid entirely in PSUs

 

Consistent with last year, 80% of CEO’s 2017 annual variable compensation tied to ongoing performance metrics (compared to U.S. Peer average of approximately 54%)1

 

Enhanced disclosure regarding PSU performance thresholds and peer group (see page 39)

 

Continued emphasis on extensive shareholder engagement and response to concerns

 

Ongoing focus on appropriately aligning pay and performance

 

Zero new shares requested under Stock Incentive Plan (see pages 9 and 70)

 

 

 

1  Based on 2017 CEO compensation data for U.S. Peers as reported in SEC filings (with respect to BAC, C and JPM) and in press articles citing bank spokesman (with respect to MS).

 

2016 SAY ON PAY VOTE SHAREHOLDER ENGAGEMENT AND COMMITTEE ACTION 2017 SAY ON PAY VOTE CONTINUED ENGAGEMENT AND ASSESSMENT

 

38        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

  PSUs – Key Facts         
             
        

 The redesign of the PSUs last year was well-received by our stakeholders, which factored into our Compensation Committee’s determination to maintain the structure of these awards for 2017

 For the first time, PSUs represent 100% of the 2017 year-end equity-based compensation granted to our entire Executive Leadership Team (who have ultimate responsibility for firmwide performance and are uniquely positioned to drive our strategic plan)

 PSUs will be paid at 0-150% of the initial award based on our average ROE (using as reported financial results) over 2018–2020, using both absolute and relative metrics as described in the below table

»  Our Compensation Committee continues to believe ROE is the appropriate risk-based metric for the PSUs because it is an important indicator of the firm’s operating performance and is viewed by many shareholders as a key performance metric

  For purposes of the relative ROE metric, our peer group consists of Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank and UBS (i.e., our U.S. Peers and European Peers)

  Our Compensation Committee has discretion to cap the percentage earned under the PSUs at 100% if our average ROE over the performance period is between 4–6% (regardless of our relative ROE)

  After the end of the performance period, the PSUs will settle one-half in cash and one-half in “Shares at Risk” (i.e., stock received from PSUs (after applicable tax withholding) will be subject to transfer restrictions through January 2023, five years from the grant date, in most cases even if the NEO leaves our firm)

 

  
       
   

 

3-YEAR AVERAGE

ABSOLUTE ROE

 

 

 

% EARNED

     

 

3-YEAR AVERAGE

RELATIVE ROE

 

 

 

% EARNED*

   
 

 

<4%

 

 

 

0%

 

  LOGO     

 

<25th percentile

 

 

 

25%

 

 
  4% to <14%  

 

Based on relative ROE;

see scale at right

 

    25th percentile   50%  
 

³ 14%

 

 

150%

 

   

 

50th percentile

 

 

 

100%

 

 
 

 

* % earned is scaled if performance is between specified thresholds

 

   

 

³ 75th percentile

 

 

 

150%

 

 
           
 

 

 

FOCUS ON PERFORMANCE THRESHOLDS

 

 
 

   Establishing our Peer Group. Our Compensation Committee believes that the PSU peer group is appropriate given that it comprehensively reflects those firms that have a significant presence across our collection of businesses (including market making, investment banking and investment management) and who have regulatory requirements similar to ours.

»   While certain other institutions have business lines that partially compete with our own, the Committee believes that their inclusion in this peer group would distort an accurate measure of the firm’s relative operating performance, given that these institutions have a less comparable mix of businesses and face significantly different balance sheet and capital requirements than our own.

»  In light of these factors, the Committee determined that the eight firms comprising our U.S. Peers and European Peers are the most appropriate peer group.

  Determining Absolute ROE Thresholds. Our Compensation Committee established the absolute ROE thresholds after reviewing historical financial performance of both our firm and our peer group. The thresholds are intended to set an appropriate range for measuring competitive performance levels in the current market environment.

»   For illustrative purposes, the highest three-year average annual ROE achieved by us or any of our U.S. Peers or European Peers over any period since 2010 was 11.0%, 300 basis points below the 14% required for maximum payout.

   Setting Relative ROE Goals. The relative ROE goals were set in order to further our Compensation Committee’s desire to more closely tie pay to performance relative to our peer group. The Committee felt it was appropriate that above-target achievement should only occur in instances where the firm outperforms peers, with below-target achievement occurring where the firm underperforms.

»   In light of these factors and consistent with peer practice, the Committee determined that target-level achievement for median performance was appropriate and, furthermore, that maximum achievement should only occur where the firm is in the top quartile of its peer group.

   Addressing U.S. Tax Legislation. We are still evaluating the impact of U.S. Tax Legislation on our firm and our industry more broadly, and the Committee intends to assess whether any adjustments to the 2017 Year-End PSUs (e.g., to reevaluate performance thresholds) are appropriate as more information is known.

 

 
           

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        39


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

How Our Compensation Committee

Made Its Decisions

 

  Our Compensation Committee made its annual compensation determinations for our NEOs in the context of our Compensation Principles, which encompass a pay for performance philosophy, and in consideration of a number of other factors, including stakeholder feedback (see pages 47-49 for more detail).

 

  Given that all of our NEOs (other than our CEO) served in new roles in 2017, the Committee did not exclusively rely on 2016 compensation amounts as a baseline for their 2017 decisions. Instead, the Committee also took into account a number of other factors, including an analysis of prior year peer company compensation and our historical compensation practices with respect to these roles, as well as the fact that, for our Executive Leadership Team, 70% of each individual’s 2017 annual compensation (80% for our CEO) would remain subject to ongoing performance conditions.

 

  Based on these factors, as well as those described on the following pages (including the individual performance achievements of each NEO described on pages 42-45), the Committee ultimately set our NEOs’ 2017 annual compensation at the amounts described on page 37. In particular:

 

»  While the Committee does not determine compensation for any NEO formulaically and instead considers performance in a holistic manner without ascribing specific weight to any single financial metric, the Committee focused in particular on our year-over-year increase in net revenues, pre-tax earnings and EPS (Ex. U.S. Tax Legislation and Stock Accounting Standard) when assessing firmwide performance.

 

»  The Committee felt that an approximately 9% year-over-year increase was appropriate for Mr. Blankfein in light of a number of factors, including that it was in line with the performance metrics described above and reflected not only his outstanding individual performance in 2017, but also the critical role he played in overseeing the transition of various executive roles throughout the year.

   

LOGO

 

*  Figures reflect change vs. 2016.

 

**For a reconciliation of these non-GAAP measures with the
   corresponding GAAP measures, please see Annex A.

 

»  Compensation for the other members of our Executive Leadership Team (Messrs. Schwartz, Solomon and Chavez) was also increased compared to 2016 in light of firmwide and individual performance considerations (including in connection with their new roles as Co-COOs and CFO, respectively).

 

»  Mr.  Gnodde’s 2017 compensation was also increased compared to 2016 in light of firmwide, regional and individual performance (including in connection with his new role as Vice Chairman and sole CEO of Goldman Sachs International).

 

»  Mr. Salame’s 2017 compensation was reduced compared to 2016 to reflect the decline in 2017 performance of Institutional Client Services, in light of his role as Global Co-Head of the Securities Division, although the Committee also took into account factors relating to firmwide and individual performance (including in connection with his new role as Vice Chairman).

 

KEY FIRMWIDE FINANCIAL PERFORMANCE METRICS CONSIDERED BY OUR COMPENSATION COMMITTEE 5%* Net revenues increased to $32.1 billion 8%* Our pre-tax earnings increased to $11.1 billion 11%* Our EPS (Ex. U.S. Tax Legislation and Stock Accounting Standard)** was $18.01 for 2017 40bps* Our ROE (Ex. U.S. Tax Legislation and Stock Accounting Standard)** was 9.8% for 2017

 

40        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

2017 Firmwide Performance

Our Compensation Committee places substantial importance on firmwide performance metrics when assessing NEO compensation amounts.

In assessing 2017 performance, the Committee believed it was appropriate to exclude the estimated negative impact of the charge related to U.S. Tax Legislation and the positive impact of the Stock Accounting Standard, given these items were outside management’s control and did not reflect the firm’s operating performance.

Key factors the Committee considered included:

 

    The firm’s solid operating performance despite a challenging environment for certain of our businesses, including net revenue growth of 5%, pre-tax earnings growth of 8% and EPS growth of 11% (Ex. U.S. Tax Legislation and Stock Accounting Standard), in each case compared to 2016 and measured on both an absolute basis and relative to our U.S. Peers and European Peers;

 

    Our focus on operating efficiency, which drove positive operating leverage, including net revenue growth that outpaced operating expense growth and a year-over-year decline in compensation ratio of 110 basis points;

 

    The firm’s strong positioning in Investment Banking, including our continued #1 position in announced and completed M&A league tables, our #1 ranking in equity and equity-related offerings and our leading position in leveraged finance, as well as the second-highest ever annual revenues for the business; and

 

    The strength of our Investment Management business, where the firm achieved record annual net revenues and record assets under supervision amid a challenging backdrop for active asset managers.

In assessing our financial performance, the Committee reviewed ROE, pre-tax earnings, EPS and BVPS, as well as our stock price performance, net revenues, net earnings, compensation and benefits expense, non-compensation expense and Compensation Ratio. All metrics were considered on a year-over-year basis, as well as, where relevant, relative to our U.S. Peers and European Peers and in the context of the broader environment in which the firm operates, on a reported and Ex. U.S. Tax Legislation and Stock Accounting Standard basis, as applicable.

 

 

2017 CEO Annual Compensation: U.S. Peer Comparison

 

  We believe peer comparability is an important factor in assessing our pay for performance alignment.

 

  The chart at right provides additional information on our pay for performance alignment in the context of 2017 annual CEO pay determinations and annual ROE for each of our U.S. Peers. For purposes of comparability, ROE is shown Ex. U.S. Tax Legislation for all firms.

   LOGO

 

1  Annual compensation includes base salary, cash bonus paid and deferred cash/equity-based awards granted, in each case for 2017 performance, as reported in SEC filings (with respect to BAC, C and JPM) and in press articles citing bank spokesman (with respect to MS).

 

 

 

$29.5mm $27mm $24mm $23mm $23mm 10.9% 9.7% 10.8% 7.9% 7.0% JPM MS GS BAC C 2017 CEO Annual Compensation1 2017 ROE (Ex. U.S. Tax Legislation)

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        41


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

2017 Individual Performance

In determining each of our NEO’s 2017 annual compensation, our Compensation Committee also considered each NEO’s key individual performance highlights and achievements. Our NEOs are evaluated under our 360° Review Process, which includes feedback in key areas such as those summarized in the graphic below:

 

 

LOGO

 

 

 

 

CEO

Under the direction of our Lead Director, our Governance Committee evaluated the performance of our CEO, including a summary of his evaluation under the 360° Review Process (see page 34 for more detail). Our Compensation Committee considered this evaluation and also discussed our CEO’s performance as part of its executive session to determine his compensation.

 

Other NEOs

Our CEO discussed the performance of our other NEOs, including a summary of their evaluations under the 360° Review Process, with our Compensation Committee. In addition, our CEO submitted variable compensation recommendations to the Committee for our other NEOs, but did not make recommendations about his own compensation.

 

 

 

 

    

 

 

 

LOGO

 

Lloyd C. Blankfein

 

Chairman and CEO

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX*

 

   

 

Our Chairman and CEO is responsible for managing our business operations and overseeing our senior leaders. He leads the implementation of corporate policy and strategy and is the primary liaison between our Board and the management of our firm. In addition to his role as the leader of our organization and people, he also serves as the primary public face of our firm.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 

 
   

 

   Led the firm’s solid operating performance despite a challenging environment for certain of our businesses; net revenues grew 5%, pre-tax earnings grew 8% and EPS grew 11%, in each case compared to 2016 and Ex. U.S. Tax Legislation and Stock Accounting Standard (as applicable).

 

   Remained highly engaged with the firm’s clients across all regions and divisions.

 

   Displayed continued exemplary leadership in guiding the firm through the transition of various executive roles, including our new Co-COOs, CFO and Vice Chairmen.

 

   Continued to prioritize development of a deep bench of talent at the firm, including by serving as a model for leadership behaviors and through an intense focus on culture, conduct and risk management.

 

   Played a key leadership role in cultivating the firm’s growth mindset.

 

   Further defined his voice as a leading authority for the financial services industry and corporate America across a number of constituencies, including government officials and the media.

 

 

 

 

* Percentages do not sum to 100% due to rounding.

 

42        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

360 REVIEW PROCESS Includes confidential input from employees, including those who are senior to, peers of and junior to the employee being reviewed RISK MANAGEMENT & FIRM REPUTATION CLIENT FOCUS LEADERSHIP & PEOPLE DEVELOPMENT COMMUNICATION DIVERSITY & INCLUSION CULTURE CARRIER COMMERCIAL CONTRIBUTIONS JUDGMENT COMPLIANCE WITH FIRM POLICIES CONTROL-SIDE EMPOWERMENT 18% variable cash compensation 8% base salary 73% PSUs PSUs represent 80% of 2017 annual variable compensation and 100% of annual equity-based compensation


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

    

 

 

 

LOGO

 

David M. Solomon

 

President and Co-COO

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX

 

   

 

Our Co-COOs are responsible for managing our day-to-day business operations and executing on firmwide priorities. They also serve as key liaisons to our clients and investors.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 
   

   Successfully transitioned to his new role as President and Co-COO, including by effectively partnering with his co-COO on a number of initiatives to review business practices and drive growth.

 

   Demonstrated broad, active and effective engagement with clients across all of our major businesses.

 

   Devoted significant attention to the quality of our client franchise while maintaining appropriate attention to reputational care, particularly through his chairmanship of the firm’s Client and Business Standards Committee and Firmwide Reputational Risk Committee.

 

   Drove the review and improvement of various people initiatives, including the Managing Director selection process, with an emphasis on key issues related to diversity.

 

 

 

 

    

 

 

 

LOGO

 

Harvey M. Schwartz

 

President and Co-COO

(retiring April 20, 2018)

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX

 

   

 

Our Co-COOs are responsible for managing our day-to-day business operations and executing on firmwide priorities. They also serve as key liaisons to our clients and investors.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 
   

   Successfully transitioned to his new role as President and Co-COO, including by effectively partnering with his co-COO on a number of initiatives to review business practices and drive growth.

 

   Demonstrated broad, active and effective engagement with clients across all of our major businesses.

 

   Spearheaded a heightened focus on enterprise risk management oversight, including through the creation of our Firmwide Enterprise Risk Committee.

 

   Played a key role in leading the firm’s dialogue with investors and the media regarding our $5 billion growth plan and with respect to issues of culture and conduct.

 
     
           

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        43

27% variable cash compensation 9% base salary 64% PSUs PSUs represent 70% of 2017 annual variable compensation and 100% of annual equity-based compensation 27% variable cash compensation 9% base salary 64% PSUs PSUs represent 70% of 2017 annual variable compensation and 100% of annual equity-based compensation


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

    

 

 

 

LOGO

 

R. Martin Chavez

 

Executive Vice President
and CFO

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX

 

   

 

Our CFO is responsible for managing the firm’s overall financial condition, including our capitalization and our funding and liquidity profile. He is also responsible for financial analysis and reporting, as well as our operations and technology functions. He is a primary liaison to our investors.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 
   

 

   Effectively transitioned to his new role as CFO, including through his integral involvement in managing critical control functions such as risk, capital, liquidity and reputational matters.

 

   Played a key role in leading the firm’s stakeholder dialogue, particularly through an effort to provide greater transparency to the firm’s investors.

 

   Served as a crucial point of contact with a broad group of regulators on a range of issues impacting our firm, our clients and the industry.

 

   Continued to be a highly effective spokesperson for, and champion of, diversity both internally and externally.

 

 
           

 

    

 

 

 

LOGO

 

Richard J. Gnodde

 

Vice Chairman and
CEO of Goldman Sachs
International

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX

 

   

 

Our CEO of Goldman Sachs International is responsible for the firm’s business and activities in the Europe, Middle East and Africa (EMEA) region. He is a key leadership presence and liaison with EMEA regulators.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 
   

 

   Continued to be an outstanding leader in the EMEA region, effectively connecting with clients, government officials and regulators.

 

   Demonstrated a steady hand in addressing issues related to Brexit across a number of constituencies, including our people and our clients.

 

   Played a key role in articulating, and executing on, the firm’s growth strategy for EMEA.

 

   Remained critically focused on issues relating to culture, reputation and risk management.

 

 
     
     
     
     
     
     
           

 

44        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

27% variable cash compensation 9% base salary 64% PSUs PSUs represent 70% of 2017 annual variable compensation and 100% of annual equity-based compensation 27% fixed allowance (cash component) 10% base salary 63% RSUs (including fixed allowance) RSUs represent 70% of 2017 annual compensation excluding base salary Note: Mr. Gnodde, who is based in the U.K., received a fixed allowance as a result of applicable U.K. regulations. See page 50 for more detail.


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

    

 

 

 

LOGO

 

Pablo J. Salame

 

Vice Chairman and
Global Co-Head of the
Securities Division

 

 

KEY RESPONSIBILITIES

 

 

2017 ANNUAL COMPENSATION MIX

 

   

 

Our Global Co-Head of the Securities Division is jointly responsible for overseeing the division’s business and activities. He serves as an important representative for the firm, particularly with Securities Division clients.

 

 

 

LOGO

   

 

KEY PERFORMANCE ACHIEVEMENTS

 

 
   

 

   Maintained a robust “tone at the top” throughout a year marked by a challenging operating environment for the Securities Division.

 

   Helped drive the Securities Division’s reassessment of its strategy and message over the course of the year.

 

   Dedicated significant time and energy to oversight of our Special Situations Group, as well as client engagement; valued by clients for his perspective and nuanced understanding of global markets.

 

   Effectively co-chaired our Partnership Committee through key initiatives such as a focus on partner retention efforts.

 
     
     
           

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        45

26% variable cash compensation 13% base salary 61% restricted stock Restricted stock represents 70% of 2017 annual variable compensation


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

 

KEY PAY PRACTICES

 

 

Our Compensation Committee believes the design of our executive compensation program is integral in furthering our Compensation Principles, including paying for performance and effective risk management. The following chart summarizes certain of our key pay practices.

 

    What We Do      
        
 

 

  Review and carefully consider stakeholder feedback in structuring executive compensation

 

  Engage proactively with shareholders

 

  Grant equity-based awards as a significant portion of our NEOs’ annual variable compensation (for 2017, at least 70%)

 

   Tie 100% of equity-based compensation granted to our CEO, Co-COOs and CFO to ongoing performance metrics

 

   Align pay with firmwide performance, including through use of PSUs, RSUs and restricted stock

 

   Apply significant share holding requirements through:

 

     »  Stock Ownership Guidelines for NEOs

 

     »  Retention requirements for PMDs

 

     »  “Shares at Risk” underlying year-end equity-based awards; transfer restrictions generally apply for five years

          after grant date to all or substantially all shares delivered to our NEOs (after applicable tax withholding), in

          most cases even if the NEO leaves our firm

 

  Exercise judgment responsive to the cyclical nature of our business, including consideration of appropriate risk-based metrics

 

  Maintain a clawback policy that applies to variable compensation awards

 

  Provide for annual assessment by our CRO of our compensation programs to ensure programs do not

     encourage imprudent risk-taking

 

  Utilize an independent compensation consultant

 

 

    What We Don’t Do      
        
 

 

û  No employment, “golden parachute” or other agreements providing for severance pay with our executive officers

 

û  No guaranteed bonus arrangements with our executive officers

 

û  No tax gross-ups for our executive officers

 

û  No repricing of underwater stock options without shareholder approval

 

û  No excessive perquisites

 

û   No ongoing service-based pension benefit accruals for executive officers

 

û   No hedging transactions or short-sales of our common stock permitted for any executive officer

 

 

46        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

 

FRAMEWORK FOR COMPENSATION DECISIONS

 

Our Compensation Committee continues to believe that, in order to achieve our overarching goal of enhancing shareholder value while promoting the safety and soundness of our firm, it is important to retain discretion to determine compensation forms and amounts for our senior executives, while tying compensation to ongoing performance metrics where appropriate.

 

  Benefits of Discretionary Elements within our Compensation Program      
   
 

 

 Our business is dynamic and requires us to respond rapidly to changes in our operating environment. A rigid, formulaic program based on metrics could hinder our ability to do so and could have unintended consequences.

 

  Our program is designed to encourage executives to act prudently on behalf of both shareholders and clients, regardless of prevailing market conditions. This goal could be compromised by a strictly formulaic program.

 

  Strictly formulaic compensation would not permit adjustments based on less quantifiable factors such as unexpected external events or individual performance.

 

  Equity-based awards comprise a significant portion of annual variable compensation for our NEOs and help to ensure long-term alignment without the disadvantages of purely formulaic compensation.

 

Our Compensation Committee has responded to shareholder feedback by changing our executive compensation program over time, which has helped to ensure that our program continues to be appropriately aligned with our Compensation Principles.

Our Compensation Principles

Our Compensation Principles guide our Compensation Committee in its review of compensation at our firm, including the Committee’s determination of NEO compensation. The full text of our Compensation Principles is available on our public website at www.gs.com/corpgov. Key elements of our Compensation Principles include:

 

 

  PAYING FOR PERFORMANCE

 

 

ENCOURAGING FIRMWIDE

ORIENTATION AND CULTURE

 

 

DISCOURAGING IMPRUDENT

RISK-TAKING

 

 

ATTRACTING AND

RETAINING TALENT

 

 

Firmwide compensation should
directly relate to firmwide
performance over the cycle.

 

 

Employees should think and act like long-term shareholders, and compensation should reflect the performance of the firm as a whole.

 

 

Compensation should be carefully designed to be consistent with the safety and soundness of our firm. Risk profiles must be taken into account in annual performance reviews, and factors like liquidity risk and cost of capital should also be considered.

 

 

 

Compensation should reward an employee’s ability to identify and create value, but the recognition of individual performance should be considered in the context of the competitive market for talent.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        47


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Compensation Committee Framework to Determine NEO Compensation

 

In addition to our Compensation Principles, our Compensation Committee is guided by our Compensation Framework, which more broadly governs the variable compensation process for employees who could expose the firm to material amounts of risk (such as our NEOs). The Committee considered the following factors in determining the amount and form of compensation to be awarded to each of our NEOs (firmwide financial performance and individual performance are discussed above on pages 41-45):

 

Stakeholder Feedback

 

    In making NEO compensation decisions, our Compensation Committee reviews and carefully considers:

 

»   Specific feedback received from shareholders and other constituents; and

 

»   The results of our Say on Pay votes.

 

   LOGO

 

    Our Compensation Committee believes that the result of our most recent Say on Pay vote (93% support) indicates that our shareholders support our compensation philosophy and program, including the enhancements made to the program last year to streamline its structure and the redesign of our PSUs.

Risk Management

 

    Effective risk management underpins everything that we do, and compensation is carefully designed to be consistent with the safety and soundness of our firm.

 

    Our CRO presented his annual risk assessment jointly to our Compensation Committee and our Risk Committee in order to assist them with evaluating our program’s design.

 

  »   This assessment is focused on whether our program is consistent with regulatory guidance requiring that financial services firms ensure that variable compensation does not encourage imprudent risk-taking.

 

  »   Our CRO’s view was that the various components of our compensation programs and policies work together to balance risk and reward in a manner that does not encourage imprudent risk-taking.

Market for Talent

 

    Our Compensation Committee reviews the competitive market for talent as part of its review of our compensation program’s effectiveness in attracting and retaining talent, and to help determine our NEOs’ compensation.

 

  »   Our goal is always to be in a position to appoint people from within the firm to our most senior leadership positions and our executive compensation program is intended to incentivize our people to stay at Goldman Sachs and to aspire to these senior roles.

 

    The Committee conducts an evaluation of our existing NEO compensation program, comparing it to that of our U.S. Peers and European Peers.

 

    The Committee performs this evaluation with information and assistance from our Global Head of Human Capital Management (HCM). The evaluation is based on information on compensation (including plan design and compensation levels for named executive officers at peer firms) and financial performance obtained from an analysis of public filings by our Finance and HCM Divisions, as well as surveys regarding incentive compensation practices conducted by Willis Towers Watson.

 

48        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders

Independent Compensation Consultant Firmwide Financial Performance Individual Performance Stakeholder Feedback CRO Input and Risk Management Market for Talent Regulatory Considerations COMPENSATION COMMITTEE DECISIONS


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Regulatory Considerations

 

    Our Compensation Committee also considers regulatory matters and the views of our regulators when determining NEO compensation. Throughout 2017, our senior management briefed the Committee on relevant regulatory developments.

Independent Compensation Consultant Input

 

    Our Compensation Committee recognizes the importance of using an independent compensation consulting firm that is appropriately qualified and that provides services solely to the Committee and not to our firm. Accordingly, the Committee again retained Semler Brossy as its independent compensation consultant in 2017.

 

    The Committee uses Semler Brossy because of the quality of its advice as well as its:

 

  »   Extensive experience working with a broad cross-section of companies;

 

  »   Multi-faceted business perspective; and

 

  »   Expertise in the areas of executive compensation, management incentives and performance measurement.

 

    In 2017, the Committee asked Semler Brossy to assess our compensation program for our PMDs, including our NEOs.

 

 

 

 

VIEWS OF INDEPENDENT COMPENSATION CONSULTANT

 

 

“The PMD pay program has continued to:

 

   Be aligned with, and sensitive to, firm performance;

 

   Contain features that reinforce significant alignment with shareholders and a long-term focus; and

 

   Utilize policies and procedures, including subjective determinations, that facilitate the firm’s approach to risk taking and risk management by supporting the mitigation of known and perceived risks.”

 

 

 

 

    Semler Brossy did not recommend, and was not involved in determining, the amount of any NEO’s compensation.

 

    In addition to providing its assessment of our compensation program for PMDs, Semler Brossy also participated in the discussion of our CRO’s compensation-related risk assessment and reviewed the peer compensation and financial information provided to the Committee by our Finance and HCM Divisions and Willis Towers Watson (as described above).

 

 

IN MARCH 2017, OUR COMPENSATION COMMITTEE DETERMINED THAT SEMLER BROSSY HAD NO CONFLICTS OF INTEREST IN PROVIDING SERVICES TO THE COMMITTEE AND WAS INDEPENDENT UNDER THE FACTORS SET FORTH IN THE NYSE RULES FOR COMPENSATION COMMITTEE ADVISORS BASED ON THESE FACTORS:

 

 

Semler Brossy provides services only to the Committee (and not to our firm).

 

 

Semler Brossy has no significant business or personal relationship with any member of the Committee or any executive officer.

 

 

 

The fees our firm paid to Semler Brossy are not material to Semler Brossy’s total revenues.

 

 

None of Semler Brossy’s principals owns any shares of
our Common Stock.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        49


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

 

OVERVIEW OF COMPENSATION ELEMENTS

 

Fixed Compensation

 

    Fixed compensation provides our NEOs with a predictable level of income that is competitive with our peers.

 

    We made no changes to NEO base salary levels ($2.0 million for our CEO and $1.85 million for our other NEOs, in each case on an annual basis), and our Compensation Committee believes that these salary levels are competitive in the market for talent. Salaries for Messrs. Solomon, Chavez, Gnodde and Salame were increased in connection with their appointments to their new roles.

 

    The requirements of the European Union’s Fourth Capital Requirements Directive limit the amount of variable compensation that is permitted to be granted to certain U.K. employees by reference to their fixed compensation. In this regard, Mr. Gnodde received a fixed allowance of $8.15 million for 2017, in addition to his base salary.

 

  »   In order to align the equity component of Mr. Gnodde’s overall 2017 compensation with that of the other NEOs, this fixed allowance was paid approximately 37% in RSUs, with the remainder paid in cash.

 

  »   The fixed allowance RSUs will deliver as Shares at Risk in three approximately equal installments in each of 2019, 2020 and 2021. Substantially all of the Shares at Risk delivered to Mr. Gnodde (after applicable tax withholding) will be restricted from sale until January 2023. However, as required by regulatory guidance, these fixed allowance RSUs are not subject to the clawback and forfeiture provisions that apply to year-end RSUs (e.g., cause and/or non-compete provisions).

Annual Variable Compensation

 

    Variable compensation provides our NEOs with the opportunity to realize cash and equity-based incentives that are aligned with firmwide and individual performance. Amounts were determined based on our Compensation Committee’s assessment of firmwide and individual performance, among other factors.

 

    In 2017, we paid annual variable compensation to our NEOs in the form of cash, PSUs, RSUs and/or shares of restricted stock. Certain material terms of each of the equity-based components are summarized below. Additional detail regarding other material terms is provided as follows:

 

  »   Clawback and forfeiture provisions are described more fully on page 54; and

 

  »   Treatment upon a termination of employment or change in control is described more fully in —Executive Compensation—Potential Payments Upon Termination or Change in Control on pages 65-68.

 

50        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

  Annual Variable Compensation – PSUs – Overview of Material Terms       
    
 

 

  Provide recipient with annual variable compensation that has a metrics-based outcome; the ultimate value paid to the NEO is tied to firm performance both through stock price and metrics-based structure

 

  PSUs will be paid at 0-150% of the initial award based on our average ROE over 2018-2020, using both absolute and relative metrics; see chart on page 39 for more detail on calculation methodology

 

»  Our Compensation Committee has discretion to cap the percentage earned under the PSUs at 100% if our average ROE over the performance period is between 4% and 6% (regardless of our relative ROE)

 

  Awards will be settled in 2021, with 50% settled in cash based on the average closing price of our Common Stock over a ten trading day period, and 50% settled in Shares at Risk (i.e., stock received from PSUs (after applicable tax withholding) will be subject to transfer restrictions through January 2023, five years after the PSU grant date)

 

»  Transfer restrictions generally prohibit the sale, transfer, hedging or pledging of underlying Shares at Risk, even if the NEO leaves our firm (subject to limited exceptions; see pages 65-68 for more detail)

 

  Average ROE is the average of the annual ROE for each year during the performance period

 

»  Annual ROE for the firm is calculated as annualized net earnings applicable to common shareholders divided by average common shareholders’ equity, as publicly reported by Goldman Sachs in its annual report

 

»  For purposes of determining ROE of our peers, annual ROE is as reported in the peer company’s publicly disclosed annual report, rounded to one decimal place

 

»  If a peer company’s ROE is not available in this form, its ROE will be its annualized net earnings applicable to common shareholders divided by average common shareholders’ equity and will be calculated using available publicly-disclosed information

 

  If the Committee determines it is necessary or appropriate to maintain intended economics of PSUs, it may make adjustments to the firm’s or a peer company’s ROE as it deems equitable in light of changed circumstances (e.g., unusual or non-recurring events resulting from accounting changes, changes in capital structure, or a material change in the firm’s or a peer company’s revenue mix or business activities); any adjustments for purposes of the relative ROE calculation will be based on publicly available data

 

»  We are still evaluating the impact of U.S. Tax Legislation on our firm and our industry more broadly, and the Committee intends to assess whether any adjustments to the PSUs (e.g., to reevaluate performance thresholds) are appropriate as more information is known

 

  The Committee may adjust the applicable peer group in certain specified circumstances (e.g., a merger or a material change in a peer company’s revenue mix or business activities)

 

  Each PSU includes a cumulative dividend equivalent payment right payable only if and when the underlying PSU award is earned

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        51


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

  Annual Variable Compensation – RSUs/Restricted Stock – Overview of Material Terms   
    
 

 

  Provide recipient with annual equity-based incentives; value tied to firm performance through stock price

 

»  For 2017 year-end compensation, Mr. Gnodde was the only NEO to receive RSUs; for 2016 year-end compensation (granted in January 2017), all of our NEOs other than Messrs. Blankfein and Schwartz received RSUs

 

»  Mr. Salame (together with certain of our other PMDs) received restricted stock rather than RSUs as part of his 2017 year-end compensation in order to provide the firm with tax savings that resulted from U.S. Tax Legislation

 

  Vested at grant; for RSUs, our general program provides that underlying shares are delivered in three approximately equal installments on first, second and third anniversaries of grant; for restricted stock, shares are delivered at time of grant

 

»  For RSUs granted to Mr. Gnodde, due to applicable U.K. regulatory requirements, underlying shares will be delivered in five approximately equal installments on the third through seventh anniversaries of grant

 

  Shares underlying RSUs are Shares at Risk, meaning that, for our NEOs, transfer restrictions generally apply for five years after the equity award grant date to all or substantially all Shares at Risk that are delivered under the award (after applicable tax withholding)

 

»  Approximately 50% of underlying shares are transferable upon delivery to permit NEOs to satisfy tax withholding obligations

 

»  For Mr. Gnodde, Shares at Risk delivered on or after the fifth anniversary of grant will be subject to transfer restrictions for one year following delivery due to applicable U.K. regulatory requirements; additionally, shares underlying Additional RSUs will only be subject to transfer restrictions for one year following delivery

 

»  Shares of restricted stock are also Shares at Risk, meaning that transfer restrictions generally apply for five years after the equity award grant date (after applicable tax withholding)

 

  Transfer restrictions generally prohibit the sale, transfer, hedging or pledging of underlying Shares at Risk, even if the recipient leaves our firm (subject to limited exceptions; see pages 65-68 for more detail)

 

  Each RSU includes a dividend equivalent payment right (other than those granted to Mr. Gnodde as part of his annual variable compensation, which cannot include this right due to applicable U.K. regulatory requirements; see page 37 for more detail); shares of restricted stock are entitled to receive dividends in the same manner as any other share of our Common Stock

 

 

Determinations Regarding Long-Term Performance Incentive Plan Awards and Certain Outstanding PSUs

 

    Our Compensation Committee previously determined to discontinue grants of LTIP awards in 2016.

 

    With respect to LTIP awards made in prior years, our Compensation Committee felt it appropriate to continue with its original expectation, established in January of 2015, that all LTIP awards have an eight-year performance period except in limited circumstances. Accordingly, the Committee determined in December 2017 that the LTIP awards originally granted to Messrs. Blankfein and Schwartz in January 2016 would have a performance period ending in December 2023, instead of December 2018.

 

    Although no amounts are earned by or paid to the recipient under the LTIP awards until the end of the applicable performance period, the notional values of these awards are adjusted upward or downward for each year of the performance period by an amount equal to our annual “ROE,” subject to an annual 12% cap (for example, the average increase in value in 2017 for the outstanding LTIP awards granted to Messrs. Blankfein and Schwartz was approximately 9.8%).

 

  »   For this purpose, as well as under the PSUs granted for services in 2014 and 2015 (2014 Year-End PSUs and 2015 Year-End PSUs, respectively), “ROE” is calculated for each year by dividing net earnings applicable to common shareholders by average monthly common shareholders’ equity, adjusted for the after-tax effects of amounts that would be excluded from “Pre-Tax Earnings” under The Goldman Sachs Amended and Restated Restricted Partner Compensation Plan (RPCP).

 

  »  

The types of amounts that could be excluded from “Pre-Tax Earnings” include, but are not limited to, amounts related to: exit or disposal activities, impairment or disposal of long-lived assets or impairment of goodwill and other intangible assets, net provisions for litigation and other regulatory proceedings and items

 

52        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

  that are unusual in nature or infrequent in occurrence and that are separately disclosed, in each case if the aggregate net effect of such amounts on Pre-Tax Earnings exceeds a pre-established threshold (for relevant RPCP provisions, see page 3 of Exhibit 10.1 of our Quarterly Report on Form 10-Q for the period ended February 24, 2006, filed April 5, 2006).

Adjustments to Certain Outstanding PSUs and LTIP Awards

 

    The 2014 and 2015 Year-End PSUs and the outstanding LTIP awards contemplate that the Committee may, in order to maintain the intended economics of the awards, make certain adjustments to the calculation of “ROE” and change in BVPS for events such as legal, regulatory and/or accounting changes, or other actions that impact capital.

 

    There were two such changes for which the Committee determined it was appropriate to adjust the calculation of “ROE” and change in BVPS for 2017. These were:

 

  »   The Stock Accounting Standard, the exclusion of which decreased our 2017 ROE by approximately one percentage point; and

 

  »   The charge relating to U.S. Tax Legislation, the exclusion of which increased our 2017 ROE and change in BVPS, in each case by approximately 6 percentage points.

 

    The Committee determined to make these adjustments given that these items were not contemplated at the time the awards were granted, were outside management’s control and did not reflect the firm’s operating performance, and it was therefore appropriate to exclude their impact.

 

    The Committee will consider the impact of U.S. Tax Legislation and the Stock Accounting Standard on the economics of the outstanding PSUs and LTIP awards for the remainder of these awards’ performance periods, consistent with their terms.

 

 

OTHER COMPENSATION POLICIES AND PRACTICES

 

Stock Ownership Guidelines and Retention Requirements

 

    Based on our Compensation Committee’s recommendation and taking into account stakeholder feedback, in January 2015 our Board adopted Stock Ownership Guidelines to supplement the longstanding retention requirements applied through our Shareholders’ Agreement (described below). These guidelines apply to all of our NEOs, as well as to any other individual in a Senior Executive position, and provide that:

 

  »   Our CEO must retain beneficial ownership of a number of shares of Common Stock equal in value to 10x his base salary for so long as he remains our CEO.

 

  »   Each other executive subject to the Stock Ownership Guidelines must retain beneficial ownership of a number of shares of Common Stock equal in value to 6x his base salary for so long as he remains in a Senior Executive position at the firm.

 

  »   Transition rules would apply in the event that an individual becomes newly appointed to a Senior Executive position.

 

    Each of our NEOs currently meets these Stock Ownership Guidelines.

 

    Separate from the Stock Ownership Guidelines, our Shareholders’ Agreement imposes retention requirements on each of our NEOs with respect to shares of Common Stock received in respect of equity awards.

 

  »   Our CEO is required, for so long as he holds that position, to retain (including, in certain cases, ownership through estate planning entities established by him) at least 75% of the shares of Common Stock received (net of payment of any option exercise price and withholding taxes) as compensation (After-Tax Shares) since becoming a Senior Executive.

 

  »   Similarly, each of our other NEOs is required, for so long as he holds a Senior Executive position, to retain at least 50% of After-Tax Shares received since becoming a Senior Executive, and for Mr. Schwartz, 75% of After-Tax Shares received as a Senior Executive prior to January 2015. Shares underlying Mr. Gnodde’s Additional RSUs will not count as After-Tax Shares for this purpose.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        53


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Clawback Policy

 

    Our Compensation Committee adopted a clawback policy in January 2015 that formalized and expanded our longstanding clawback practices in a comprehensive, standalone policy. The policy applies to all of our NEOs, as well as to any other individual in a Senior Executive position, and permits recovery of awards (including equity-based awards, underlying Shares at Risk, cash variable compensation and historical LTIP awards, as applicable) in certain circumstances.

 

    The clawback policy also expands the Sarbanes-Oxley Clawback provisions to apply to variable compensation (whether cash- or equity-based) paid to any of our Senior Executives (even though the Sarbanes-Oxley Act provision on which it is based requires the clawback to apply only to our CEO and CFO).

 

    As in prior years, 2017 year-end PSUs and RSUs (and underlying Shares at Risk), as well as restricted stock, granted to our NEOs are subject to forfeiture or recapture by us in certain cases, even after applicable transfer restrictions lapse.

 

  »   If we determine that Shares at Risk/restricted stock may be recaptured after delivery, we can require the return of those shares to us or the repayment to us of the fair market value of the shares (including those retained to pay withholding taxes) and any other amounts, such as dividends or dividend equivalents, paid or delivered in respect thereof.

 

    2017 year-end PSUs and RSUs (and, in certain cases, underlying Shares at Risk) provide for forfeiture or recapture if:

 

  »   The Committee determines that during 2017, the NEO participated (including, in certain cases, participation in a supervisory role) in actions on behalf of our firm or our clients without appropriately considering risk of any kind to our firm or the broader financial system, which have or reasonably could be expected to result in a material adverse impact on our firm, the NEO’s business unit or the broader financial system;

 

  »   Our firm is determined by bank regulators to be “in default” or “in danger of default” as defined under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or fails to maintain for 90 consecutive business days the required “minimum Tier 1 capital ratio” (as defined under Federal Reserve Board regulations);

 

  »   The events covered by our Sarbanes-Oxley Clawback occur;

 

  »   The NEO engages in conduct constituting “cause” (e.g., any material violation of any firm policy or conduct detrimental to our firm); or

 

  »   The NEO associates with any business enterprise that competes with any portion of our business.

 

    Mr. Salame’s 2017 year-end restricted stock contains similar forfeiture and recapture provisions as those described in the preceding bullet.

 

    Mr. Gnodde’s year-end RSUs (and, in certain cases, underlying Shares at Risk) are also subject to several additional clawback provisions mandated by U.K. regulations. These provisions contemplate clawback in the event of:

 

  »   A material downturn in financial performance suffered by the firm or certain business units;

 

  »   A material failure of risk management suffered by the firm or certain business units on or before December 31, 2024;

 

  »   Serious misconduct that is sufficient to justify summary termination of employment under English law occurring on or before December 31, 2024 (to the extent not otherwise covered by the “cause” clawback described above); or

 

  »   A failure of supervision that is deemed to occur in the event of the serious misconduct of an employee during 2017, over whom Mr. Gnodde has supervisory responsibility, where that serious misconduct relates to compliance, control or risk.

Hedging Policy; Pledging of Common Stock

Our NEOs are prohibited from hedging any shares of our Common Stock, even shares they can freely sell, for so long as they remain executive officers. In addition, our NEOs and all other employees are prohibited from hedging their equity-based awards. Our employees, other than our executive officers, may hedge only shares of our

 

54        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

Common Stock that they can otherwise sell. However, they may not enter into uncovered hedging transactions and may not “short” shares of our Common Stock. Employees also may not act on investment decisions with respect to our Common Stock except during applicable “window periods.” None of our executive officers has any shares of Common Stock subject to a pledge.

Qualified Retirement Benefits

During 2017, each of our NEOs (other than Mr. Gnodde) participated in The Goldman Sachs 401(k) Plan (401(k) Plan), which is our U.S. broad-based tax-qualified retirement plan. In 2017 these individuals were eligible to make pre-tax, and/or “Roth” after-tax, contributions to our 401(k) Plan and receive a dollar-for-dollar matching contribution from us on the amount they contributed, up to a maximum of $10,800. For 2017, these individuals each received a matching contribution of $10,800.

During 2017, Mr. Gnodde participated in the Goldman Sachs U.K. Defined Contribution Pension Plan, which was replaced mid-year by an arrangement known as LifeSight (together, the U.K. Defined Contribution Arrangements). Under the terms of the U.K. Defined Contribution Arrangements, eligible employees receive a firm contribution up to a capped percentage of salary (which, for 2017, equaled £13,365) and are also able to make their own contributions to the plan. For 2017, Mr. Gnodde received a firm contribution of £13,365.

Perquisites and Other Benefits

Our NEOs received in 2017 certain benefits that are considered “perquisites” for purposes of the SEC rules regarding compensation disclosure. While our Compensation Committee was provided with the estimated value of these items, it determined, as in prior years, not to give these amounts significant consideration in determining our NEOs’ 2017 variable compensation.

During 2017, we made available to each of these individuals (other than Mr. Gnodde) a car and driver and, in some cases, other services for security and/or business purposes. We also offered our NEOs benefits and tax counseling services, generally provided or arranged by our subsidiary, The Ayco Company, L.P. (Ayco), to assist them with tax and regulatory compliance and to provide them with more time to focus on the needs of our business.

Our PMDs, including our NEOs, participate in our executive medical and dental program and receive executive life insurance while they remain PMDs. Our PMDs, including our NEOs, also receive long-term disability insurance coverage. Our NEOs (and their covered dependents) are also eligible for a retiree health care program and receive certain other perquisites, some of which have no incremental cost to us. See “All Other Compensation” and footnote (b) in —Executive Compensation—2017 Summary Compensation Table.

Section 162(m)

Under current law, our U.S. federal corporate tax deduction for compensation paid to our NEOs (who are generally considered “covered employees” under Section 162(m) of the Internal Revenue Code (the Code)) is generally limited to $1 million. Prior to the U.S. Tax Legislation’s modifications to Section 162(m), certain compensation that qualified as “performance-based compensation” under Section 162(m) did not count against this $1 million deduction limit. Amounts awarded pursuant to the RPCP, our shareholder-approved plan under which we have historically paid variable compensation to members of our Management Committee, including our NEOs, have historically been intended to constitute qualified performance-based compensation under Section 162(m). The RPCP provides for a maximum amount of variable compensation determined pursuant to a formula contained in the RPCP, with the Compensation Committee retaining the discretion to pay less than the formula amount. Our NEOs’ variable compensation for 2017, including equity-based awards, was determined under the RPCP.

As a result of the U.S. Tax Legislation’s modifications to Section 162(m), we anticipate that beginning in 2018, we will not be able to deduct compensation paid to our NEOs (and any other “covered employee” under Section 162(m)) in excess of $1 million. In light of this change in law, while we may not formally terminate the RPCP, we do not anticipate that any of our employees will participate in the RPCP in 2018 or thereafter. We may be able to deduct in 2018 or thereafter certain compensation paid to “covered employees” to the extent it is eligible for transition relief under the newly modified Section 162(m) and any rules promulgated thereunder. However, there is no guarantee that any such compensation will be deductible, and the firm may determine that certain compensation cannot qualify for such transition relief or that it does not wish to take or refrain from taking steps necessary to qualify for such relief.

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        55


Table of Contents

Compensation Matters | Compensation Discussion and Analysis

 

 

 

GS GIVES

 

As a key element of the firm’s overall impact investing platform, we established our GS Gives program to coordinate, facilitate and encourage global philanthropy by our PMDs. The firm contributed approximately $130 million for the 2017 GS Gives program, with PMD compensation being reduced to fund this contribution.

GS Gives underscores our commitment to philanthropy through diversified and impactful giving, harnessing the collaborative spirit of the firm’s partnership, while also inspiring our firm’s next generation of philanthropists. We ask our PMDs to make recommendations of not-for-profit organizations to receive grants from the firm’s contributions to GS Gives.

Grant recommendations from our PMDs help to ensure that GS Gives invests in a diverse group of charities that improve the lives of people in communities where we work and live. We encourage our PMDs to make recommendations of grants to organizations consistent with GS Gives’ mission of fostering innovative ideas, solving economic and social issues, and enabling progress in underserved communities globally. GS Gives undertakes diligence procedures for each donation and has no obligation to follow recommendations made to us by our PMDs.

In 2017, GS Gives accepted the recommendations of over 500 current and retired PMDs and granted over $156 million to over 2,000 not-for-profit organizations around the world. GS Gives made grants in support of a broad range of large-scale initiatives, including ongoing need-based financial aid at colleges and universities globally, addressing access and completion for students of all backgrounds; multi-faceted responses to Hurricanes Harvey, Irma and Maria and the Mexican earthquakes; the second-annual Analyst Impact Fund competition, a Partnership Committee-led initiative in which teams of analysts in all regions enter to win a GS Gives grant recommendation for charities of their choosing; and broad-reaching poverty alleviation efforts across Asia. The U.S. Dollar equivalent amounts donated in 2017 by GS Gives based on the following individuals’ recommendations were: Mr. Blankfein—$3.8 million; Mr. Solomon—$1.8 million; Mr. Schwartz—$4.3 million; Mr. Chavez—$2.0 million; Mr. Gnodde—$3.0 million; and Mr. Salame—$2.6 million.

 

56        Goldman Sachs  |  Proxy Statement for the 2018 Annual Meeting of Shareholders


Table of Contents

Compensation Matters | Executive Compensation

 

Executive Compensation

The 2017 Summary Compensation Table below sets forth compensation information relating to 2017, 2016 and 2015. Pursuant to SEC rules, compensation information for Messrs. Solomon, Chavez, Gnodde and Salame is only reported for 2017, the year that each executive became a named executive officer. For a discussion of 2017 NEO compensation, please read —Compensation Discussion and Analysis above.

Pursuant to SEC rules, the 2017 Summary Compensation Table is required to include for a particular year only those equity-based awards granted during that year, rather than awards granted after year-end, even if awarded for services in that year. SEC rules require disclosure of cash compensation to be included in the year earned, even if payment is made after year-end.

Generally, we grant equity-based awards and pay any cash variable compensation for a particular year shortly after that year’s end. Mr. Gnodde’s fixed allowances were treated similarly. As a result, annual equity-based awards, cash variable compensation and Mr. Gnodde’s fixed allowance are disclosed in each row of the table as follows:

2017

 

  “Salary” includes the cash-based component of Mr. Gnodde’s fixed allowance for 2017

 

  “Bonus” is cash variable compensation for 2017

 

  “Stock Awards” are PSUs and RSUs awarded for 2016 (including Mr. Gnodde’s equity-based fixed allowance for 2016)

 

  PSUs, restricted stock and RSUs awarded for 2017 (including the equity-based component of Mr. Gnodde’s fixed allowance for 2017) are not included because they were granted in January 2018

2016

 

  “Bonus” is cash variable compensation for 2016

 

  “Stock Awards” are PSUs and RSUs awarded for 2015

 

  PSUs and RSUs awarded for 2016 are not included because they were granted in January 2017

2015

 

  “Bonus” is cash variable compensation for 2015

 

  “Stock Awards” are PSUs and RSUs awarded for 2014

 

 

Proxy Statement for the 2018 Annual Meeting of Shareholders  |  Goldman Sachs        57


Table of Contents

Compensation Matters | Executive Compensation

 

 

2017 SUMMARY COMPENSATION TABLE

 

 

               

NAME AND

PRINCIPAL POSITION

  YEAR     SALARY ($)     BONUS
($)
    STOCK
AWARDS
(a)
($)
    CHANGE IN
PENSION
VALUE ($)
    ALL OTHER
COMPENSATION
(b)
($)
   

TOTAL

($)

 

Lloyd C. Blankfein

Chairman and CEO

 

 

 

 

 

2017  

 

 

 

 

 

 

 

 

2,000,000    

 

 

 

 

 

 

4,400,000

 

 

 

 

 

 

15,240,145

 

 

 

 

 

 

4,909

 

 

 

 

 

 

350,212

 

 

 

 

 

 

21,995,266

 

 

 

 

 

 

 

2016  

 

 

 

 

 

 

 

 

 

2,000,000    

 

 

 

 

 

 

 

 

 

4,000,000

 

 

 

 

 

 

 

 

 

13,867,044

 

 

 

 

 

 

 

 

 

2,524

 

 

 

 

 

 

 

 

 

337,330

 

 

 

 

 

 

 

 

 

20,206,898

 

 

 

 

 

 

 

 

 

2015  

 

 

 

 

 

 

 

 

 

2,000,000    

 

 

 

 

 

 

 

 

 

6,300,000

 

 

 

 

 

 

 

 

 

13,909,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

377,074

 

 

 

 

 

 

 

 

 

22,586,152

 

 

 

 

 

David M. Solomon

President