DEF 14A 1 d813631ddef14a.htm DEF 14A DEF 14A
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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)

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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.

 

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       LOGO

Goldman Sachs

 

 

 

The Goldman Sachs Group, Inc.

 

                              

 

Annual Meeting of Shareholders

 

Proxy Statement

 

2020

 


Table of Contents

THE GOLDMAN SACHS GROUP, INC.—NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS

 

 

The Goldman Sachs Group, Inc.

200 West Street, New York, New York 10282

Notice of 2020 Annual Meeting of Shareholders

 

ITEMS OF BUSINESS

 

    Item 1. Election to our Board of Directors of the 11 director nominees named in the attached Proxy Statement for a one-year term

 

    Item 2. An advisory vote to approve executive compensation (Say on Pay)

 

    Item 3. Ratification of the appointment of PwC as our independent registered public accounting firm for 2020

 

    Items 4–5. Consideration of certain shareholder proposals, if properly presented by each relevant shareholder proponent

 

    Transaction of such other business as may properly come before our 2020 Annual Meeting of Shareholders

 

  TIME

 

 

8:30 a.m., New York time

  DATE   Thursday, April 30, 2020
  ACCESS*  

Our Annual Meeting can be accessed virtually at:

www.virtualshareholdermeeting.com/GS2020 

 

    

 

  RECORD

  DATE

 

 

March 2, 2020

The close of business on the record date is when it is determined which of our shareholders are entitled to vote at our 2020 Annual Meeting of Shareholders, or any adjournments or postponements thereof

 

 

 

*

In light of the coronavirus, or COVID-19, outbreak, for the safety of all of our people, including our shareholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the 2020 Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. If you plan to participate in the virtual meeting, please see Frequently Asked Questions. Shareholders will be able to attend, vote and submit questions (both before, and for a portion of, the meeting) from any location via the Internet.

Your vote is important to us. Please exercise your shareholder right to vote.

By Order of the Board of Directors,

 

 

LOGO

Beverly L. O’Toole

Assistant Secretary

March 20, 2020

 

Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting to be held on April 30, 2020. Our Proxy Statement, 2019 Annual Report to Shareholders and Notice of Settlement of Stockholder Derivative Action are available on our website at www.gs.com/proxymaterials. By March 20, 2020, 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 2019 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 24, 2020. For more information, see Frequently Asked Questions.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs


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  

2020 Annual Meeting Information

    1  

Matters to be Voted on at our 2020 Annual Meeting

    1  

Strategy and Performance Highlights

    2  

Compensation Highlights

    5  

Corporate Governance Highlights

    6  
Corporate Governance     8  

Corporate Governance Snapshot

    8  

Item 1. Election of Directors

    9  

Our Directors

    9  

Independence of Directors

    16  

Structure of our Board and Governance Practices

    17  

Our Board Committees

    17  

Board and Committee Evaluations

    19  

Board Leadership Structure

    20  

Year-Round Review of Board Composition

    22  

Director Education

    23  

Commitment of our Board

    23  

Board Oversight of our Firm

    25  

Key Areas of Board Oversight

    25  
Stakeholder Engagement     29  
Compensation Matters     31  

Compensation Discussion and Analysis

    31  

2019 NEO Compensation Determinations

    31  

How Our Compensation Committee
Makes Decisions

    32  

Overview of Compensation Elements and Key Pay
Practices

    36  

2019 Compensation

    37  

Equity-Based Variable Compensation Elements—A
More Detailed Look

    42  

Other Compensation Policies and Practices

    43  

GS Gives

    46  

Executive Compensation

    47  

2019 Summary Compensation Table

    48  

2019 Grants of Plan-Based Awards

    49  

2019 Outstanding Equity Awards at Fiscal Year-End

    50  

2019 Stock Vested

    50  

2019 Pension Benefits

    51  

2019 Non-Qualified Deferred Compensation

    52  

Potential Payments Upon Termination or Change in
Control

    53  

Compensation Committee Report

    56  

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

    57  

Pay Ratio Disclosure

    58  

Non-Employee Director Compensation Program

    59  
Audit Matters     62  

Item 3. Ratification of PwC as our Independent
Registered Public Accounting Firm for 2020

    62  

Report of our Audit Committee

    64  
Items 4–5. Shareholder Proposals     65  
Certain Relationships and Related Transactions     70  
Beneficial Ownership     74  
Additional Information     77  
Frequently Asked Questions     79  
Annex A: Calculation of Non-GAAP Measures     A-1  
Annex B: Additional Details
on Director Independence
    B-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 our business and expense savings initiatives and interest expense savings and may relate to, among other things, our future plans and results, including our target ROE, ROTE, efficiency ratio and CET1 capital ratio, and how they can be achieved, and various legal proceedings or governmental investigations. It is possible that the firm’s actual results, including the incremental revenues and savings, if any, from such initiatives, and financial condition may differ, possibly materially, from the anticipated results, financial condition and incremental revenues and savings 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, 2019. Statements about Goldman Sachs’ business and expense initiatives are subject to the risk that the firm’s businesses may be unable to generate additional incremental revenues or reduce expenses consistent with current expectations.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        i


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LETTER FROM OUR CHAIRMAN AND CEO

 

 

Letter from our Chairman and CEO   

 

LOGO

 

Goldman Sachs

 

March 20, 2020

Fellow Shareholders:

I am pleased to invite you to attend the 2020 Annual Meeting of Shareholders of The Goldman Sachs Group, Inc., to be held virtually via the Internet. 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 2019 Annual Report to Shareholders. Your vote is important to us: even if you do not plan to attend the meeting, we hope your vote will be represented.

As we issue this Proxy Statement, the world is facing a global health crisis and volatile market environment with significant unknowns related to COVID-19. It is a fluid and historic situation, and we are taking actions to support our people, their families and our clients. We have enacted business continuity plans so that we can continue to serve our clients while protecting the well-being of our people. Helping clients navigate dynamic environments is core to what we do, and we will stand by and assist them always.

In our 2019 letter to shareholders, which is included in the Annual Report, we discuss our purpose and core values as an organization, as well as our competitive strengths. We also outline our new operating approach and our strategic direction. To this end, we lay out our three-year targets and our path to mid-teen or higher ROEs over the longer term. We are building on and enhancing a set of market-leading businesses which, coupled with new growth initiatives, we are confident will carry us into a future of higher, more sustainable returns for shareholders.

I would like to personally thank you for your continued support of Goldman Sachs. The health and safety of all of our people, including you, our shareholders, remains paramount as we invest together in the future of this firm.

 

 

LOGO

David M. Solomon

Chairman and Chief Executive Officer

 

 

LOGO

 

 

OUR PURPOSE

We advance sustainable economic growth and financial opportunity

OUR CORE VALUES

 

Partnership     Integrity
        
Client Service     Excellence

Our core values have endured for over 150 years, driven by a spirit of partnership

 

 

LOGO

 

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LETTER FROM OUR LEAD DIRECTOR

 

 

Letter from our Lead Director   

 

LOGO

Goldman Sachs

 

 

March 20, 2020

To my fellow shareholders,

With the 2020 Annual Meeting fast approaching, I consider it my distinct privilege as your Lead Director to reflect upon the last year and share with you some of the highlights of the work of our Board. 2019 was, once again, an active year for our Board, with 58 regular Board and committee meetings, and for me, as Lead Director, with over 80 additional meetings, calls and engagements with the firm and its people, our shareholders, regulators and other stakeholders, including meetings with shareholders representing over 20% of our shares outstanding.

2019 was a year in which we reflected on the firm’s history. The firm’s 150th anniversary provided us with a unique opportunity to consider and reinforce the firm’s core values and purpose, which will serve as the cornerstone of our strategic priorities as we invest in the firm’s next 150 years. To this end, our new executive leadership team, David Solomon, John Waldron and Stephen Scherr, together with the entire firm, have worked tirelessly to chart the firm’s future course and bring both long-term value to our shareholders and enduring value to our communities.

Our Board has provided guidance and oversight throughout this process as part of our fundamental role as stewards of the firm. In this regard, we have engaged regularly with David, John and Stephen, providing insight and advice as they refined their strategic vision and developed and began to execute on a growth strategy that reflects the firm’s core values, leverages its foundational advantages and is grounded in sound risk management.

As a Board, during 2019 we engaged with senior management and leaders across the firm on businesses and strategies covering the full breadth of the firm’s franchises and on the development of new businesses, from the Investment Banking client coverage expansion, Transaction Banking, Marquee and Third Party Alternatives to the launch of the firm’s first credit card offering and the review of other organic and inorganic growth opportunities. In each case, we have seen David, John and Stephen redouble their commitment to harnessing the best the firm has to offer as we expand into new products and markets and invest in our core franchises to more effectively and efficiently deliver One Goldman Sachs to our clients and customers. The firm has also made significant efforts to bolster this clear strategic direction with a new operating approach that prioritizes a client-centric organizational structure while maintaining appropriate controls, a longer-term operating focus, a growth investment mindset and enhanced accountability and transparency.

Accountability and transparency were core themes of the firm’s inaugural Investor Day earlier this year. From the firm’s reorientation of its reporting segments to the announcement of medium-term (three-year) financial targets and detailed presentations during Investor Day, these steps are emblematic of our commitment to provide all of our stakeholders with additional insight into the firm’s strategic direction and drive greater accountability—both internally and externally—as the firm executes on these goals. As a Board, we strongly support senior management’s renewed commitment to these priorities, as we believe it will ultimately drive enhanced long-term value for our shareholders.

Our Board has been pleased with the steadfast commitment that our executive leadership team has shown over the past year and their willingness to make the necessary investments in our firm’s businesses, technology and people, which we believe will set the firm on a path to achieve its forward goals. In particular, we appreciate their commitment to the development of the firm’s “next generation” of leaders and doing so with a focus on our diverse professionals; the continued strength, depth and diversity of the firm’s leadership bench will be paramount to the firm’s long-term success. We will continue to engage with David, John and Stephen on this critical topic, and, as always, will seek out opportunities to engage with our next generation of leadership both in and outside of the boardroom.

Senior management is dedicated to operating the firm in a sustainable and inclusive way. Sustainability is core to the firm’s purpose, and at Investor Day David spoke about the importance of corporations focusing on the bottom line, but doing so sustainably and responsibly. Sustainability is also increasingly important to our clients, and in December 2019 the firm announced a new $750 billion sustainable finance target over the next ten years across

 

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LETTER FROM OUR LEAD DIRECTOR

 

 

the areas of climate transition and inclusive growth. Our Board wholeheartedly endorses this mindset, and sustainability-related considerations are a regular part of our Board and Committee discussions, whether it be climate risk considerations, updates from the firm’s new Sustainable Finance Group, discussion of our aspirational diversity goals and broader talent strategy or the impact we make on our communities through Corporate Engagement programs.

In closing, I want to confirm that our Board strongly believes that, to most effectively carry out our duties, our composition must reflect an appropriate diversity—broadly defined—of demographics, viewpoints, experiences and expertise. We believe our Board has significantly benefitted from the enhanced diversity we have achieved through our most recently added independent directors—Ellen Kullman, Drew Faust and Jan Tighe. Ongoing review of our Board’s composition is an item that will always be top of mind and on our agenda, and we remain committed to ensuring that our Board has an appropriate mix and balance of skills and experiences. To this end, we are actively engaged in an ongoing search for new directors, focused on candidates who will add to the diversity of our Board.

On behalf of our Board, I want to thank you for your ongoing support of both our Board and the firm. We are cognizant of the challenges and uncertainty posed by the spread of coronavirus, or COVID-19, for the firm, our people, our shareholders, our clients and other stakeholders, and our Board remains diligent and focused on its work. We value your investment and our ongoing engagement, which is invaluable to me and informs the work of our entire Board. Stay safe and healthy, and I look forward to continuing our dialogue in the year to come.

 

 

LOGO

Adebayo O. Ogunlesi

Lead Director

 

iv        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


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EXECUTIVE SUMMARY—2020 ANNUAL MEETING INFORMATION

 

 

Executive Summary

This summary highlights information from our Proxy Statement for the 2020 Annual Meeting. You should read the entire Proxy Statement carefully before voting. Please refer to our glossary in Frequently Asked Questions on page  79 for definitions of some of the terms and acronyms we use.

2020 Annual Meeting Information

 

   

DATE AND TIME

  

8:30 a.m., New York time
Thursday, April 30, 2020

   

ACCESS*

  

Our Annual Meeting can be accessed virtually via the Internet at:

www.virtualshareholdermeeting.com/GS2020.

 

To participate (e.g., submit questions and/or vote), you will need the control number provided on your proxy card, voting instruction form or Notice. If you are not a shareholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to participate.

RECORD DATE

  

March 2, 2020

 

*

In light of the coronavirus, or COVID-19, outbreak, for the safety of all of our people, including our shareholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the 2020 Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. At our virtual Annual Meeting, shareholders will be able to attend, vote and submit questions by visiting www.virtualshareholdermeeting.com/GS2020. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in these proxy materials. Additional information can also be found at www.gs.com/proxymaterials.

Matters to be Voted on at our 2020 Annual Meeting

 

     
  BOARD
    RECOMMENDATION
    
    PAGE    
     
Item 1. Election of Directors     FOR each director       9  
     
Other Management Proposals
     
Item 2. An Advisory Vote to Approve Executive Compensation (Say on Pay)     FOR       57  
     
Item  3. Ratification of PwC as our Independent Registered Public Accounting Firm for 2020     FOR       62  
     
Shareholder Proposals

 

 

     

Item  4. Shareholder Proposal Regarding Right to Act by Written Consent

Requests that the Board undertake steps to permit shareholder action without a meeting
by written consent

    AGAINST       65  
     

Item  5. Shareholder Proposal Regarding Board Oversight of the “Statement on the Purpose
of a Corporation”

Requests that the Board provide oversight and guidance as to the firm’s implementation of the
“Statement on the Purpose of a Corporation” signed by our Chairman and CEO

    AGAINST       67  

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        1


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EXECUTIVE SUMMARY—STRATEGY AND PERFORMANCE HIGHLIGHTS

 

 

Strategy and Performance Highlights

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

2019 Highlights

 

2019 was the first full year for our Executive Leadership Team (our CEO, COO and CFO) in their new roles. Under their leadership, the firm developed a long-term growth strategy that is founded on a new operating approach for the firm.

 

 

LOGO

 DEVELOPMENT & EXECUTION OF LONG-TERM GROWTH STRATEGY Grow and Strengthen Existing Businesses Higher Wallet Share Diversify our Products and Services More Durable Earnings Operate More Efficiently Higher Margins and Returns IMPLEMENTATION OF NEW OPERATING APPROACH Client-Centric Organizational Structure Delivering One Goldman Sachs Longer Term Operating Focus Multi-year financial planning process Investing for Growth Improving existing businesses and building new businesses Enhanced Accountability Transparency and performance targets

These initiatives also enabled the firm to announce the following financial targets at our first-ever Investor Day in January 2020:

MEDIUM-TERM (3-YEAR) FINANCIAL TARGETS(a)

 

LOGO

 

ROE / ROTE    

 

 

 

 

 

  Efficiency Ratio    

 

 

 

 

 

  CET1 Ratio
>13% / >14%  

 

 

 

  ~60%  

 

 

 

  13-13.5%
       

New business growth positions Goldman Sachs to generate mid-teens

or higher returns over longer-term (next 5+ years)

 

(a) These targets should be viewed in the context of a normalized operating environment.

 

2        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


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EXECUTIVE SUMMARY—STRATEGY AND PERFORMANCE HIGHLIGHTS

 

 

2019 Key Financial Performance Highlights—Consistent, Solid Net Revenue Performance

We achieved 2019 net revenues of approximately $36.5 billion, essentially unchanged from 2018, demonstrating revenue durability and the continued strength of our franchise following strong year-over-year growth in 2018.

Net Revenues ($bn)

 

 

2013 2014 2015 2016 2017 2018 2019 $34.4 $34.6 $34.1 $30.8 $32.7 $36.6 $36.5 2013-2017 Avg. $33.3 LOGO

Our results reflect our 2019 litigation expense and our investments for growth(a), which together reduced our 2019 ROE in excess of 200 basis points:

 

 

10.0%

ROE

    

 

10.6%

ROTE(b)

    

 

68%

Efficiency Ratio

    

5.4%

BVPS Growth

Year-Over-Year

              

 

$10.6bn

Pre-Tax Earnings

    

 

$21.03

EPS

    

 

40.5%

1-Year TSR

    

13.3%

Standardized CET1

Capital Ratio

 

  (a)

Includes our investments in our digital platform, Marcus by Goldman Sachs, our credit card activities and our transaction banking activities.

 

  (b)

For a reconciliation of this non-GAAP measure to the corresponding GAAP measure (ROE), please see Annex A: Calculation of Non-GAAP Measures.

 

The continued strength of our franchise, as well as the development and initial execution of our long-term growth strategy, is reflected in our strong 1-year TSR.

 

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EXECUTIVE SUMMARY—STRATEGY AND PERFORMANCE HIGHLIGHTS

 

 

Key Business Highlights

 

 

INVESTMENT BANKING

 

   

GLOBAL MARKETS

 

 

 

 

Net Revenues: $7.6bn

 

   

 

 

Net Revenues: $14.8bn

 

 

 

#1 in M&A and Equity Underwriting(a)

 

 

     

 

#2 Institutional Client Franchise(b)

 

 

 

 

  The firm ranked #1 in worldwide announced and completed mergers and acquisitions and equity and equity-related offerings and common stock offerings for the year

 

  Net revenues were lower year-over-year, reflecting lower net revenues in Underwriting and Financial advisory, partially offset by higher net revenues in Corporate lending

     

 

  Net revenues in Fixed Income, Currency and Commodities (FICC) were higher year-over-year, driven by significantly higher net revenues in commodities and mortgages and higher net revenues in interest rate products within FICC intermediation

 

 
   

  Net revenues in Equities were essentially unchanged year-over-year, reflecting lower net revenues in derivatives within Equities intermediation and higher net revenues in Equities financing

 

 

 
       

 

ASSET MANAGEMENT

 

     

CONSUMER & WEALTH MANAGEMENT

 

 

 

 

Net Revenues: $9.0bn

 

     

 

 

Net Revenues: $5.2bn

 

 

World-Class Active Asset Manager

 

 

     

 

Premier Financial Advisor

 

 

 

 

  Net revenues were essentially unchanged year-over-year, reflecting higher net revenues in Equity investments, offset by significantly lower Incentive fees and lower Lending net revenues

 

     

 

  Record net revenues, including record Management and other fees in Wealth management

 

  Significant growth in Consumer banking net revenues, driven by higher net interest income

 

 

 

 

 

Record Firmwide Assets Under Supervision

 

 

 

  Firmwide assets under supervision increased $317 billion during the year (up 21%) to a record $1.86 trillion

 

 

 

(a)  Source: Dealogic

 

(b)  Source: Coalition institutional client analytics for FY2018. Institutional clients only. Analysis excludes captive, and non-core products.

 

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EXECUTIVE SUMMARY—COMPENSATION HIGHLIGHTS

 

 

Compensation Highlights (see Compensation Matters, beginning on page 31)

Highlights of our compensation program and 2019 Compensation Committee decisions for our NEOs are described 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 and 2019 compensation decisions.

 

 

 

2019 COMPENSATION

 

   
       
OUR NEOS  

TOTAL
COMPENSATION  
($ IN MILLIONS)

 

 

YEAR-END

EQUITY-BASED AWARDS

($ IN MILLIONS)

 

         
     

David M. Solomon, Chairman and CEO

 

 

 

$27.5

 

 

$17.85 (100% PSUs)

 

    LOGO    

 

Equity

amount at

grant; PSUs

subject to

ongoing performance metrics (absolute &

  relative ROE)  

 

John E. Waldron, President and COO

 

  $24.5

 

 

$13.59 (100% PSUs)

 

 

Stephen M. Scherr, CFO

 

  $22.5

 

 

$12.39 (100% PSUs)

 

 

John F.W. Rogers, EVP

 

  $11.5

 

 

$6.0 (25% PSUs, 75% RSUs)

 

 

Karen P. Seymour, EVP & General Counsel

 

  $9.0

 

 

$4.5 (25% PSUs, 75% RSUs)  

 

 

LOGO

2019 COMPENSATION REFLECTS Development & execution of long-term growth strategy Implementation of new operating approach Consistent, solid net revenue performance Strong individual performance Building foundation for more durable revenues over time Driving enhanced discipline, accountability and transparency Demonstrating continued strength of our franchise Exemplary leadership and tone at the top; first full year in role for Executive Leadership Team Compensation incentivizes continued long-term, sustainable growth and achievement of financial targets without undue emphasis on shorter-term results

 

2019 ANNUAL MEETING FEEDBACK

   

STAKEHOLDER

ENGAGEMENT:

 

 

STAKEHOLDER FEEDBACK:

 

 

SAY ON PAY:

 

Extensive governance-
related engagement
with shareholders
representing more than 

35% of Common Stock
outstanding and other key
stakeholders

 

 

LOGO

 

 

New PSU design for 2018 (continued for 2019)

 

High percentage of performance-based pay

 

Engagement and responsiveness

 

Transparent proxy disclosure

 

 

~91%

shareholder support for Say on Pay Vote reflects positive feedback for compensation program

DEMONSTRATED CONTINUED SUPPORT FOR OUR:

 

 
ENHANCEMENTS FOR 2019 COMPENSATION

 

Building upon what we heard from stakeholders, for 2019 compensation we introduced:

 

  New Performance Assessment Framework — enhances transparency regarding certain key factors considered by the Compensation Committee in connection with compensation decisions for our NEOs and other senior leaders (our Management Committee); also more closely aligns performance metrics and goals across our Management Committee with our firmwide forward strategy

 

  Granted PSUs beyond our Executive Leadership Team to our Management Committee — ties a portion of our Management Committee’s compensation to ongoing performance metrics and works to broadly incentivize the achievement of our strategic targets

 

 

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EXECUTIVE SUMMARY—CORPORATE GOVERNANCE HIGHLIGHTS

 

Key Facts About our Board

 

Corporate Governance Highlights (see Corporate Governance, beginning on page 8)

 

 

  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. 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.

 

 
NOMINEE SKILLS & EXPERIENCES

 

5

 

 

11

 

 

11

 

 

6

 

 

5

 

 

8

 

 

3

 

 

10

 

               

FINANCIAL  

SERVICES  

INDUSTRY  

COMPLEX OR

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

 

  

4

 

  

All

 

     

Compensation

 

  

4

 

  

All

 

     

Governance

 

  

9

 

  

All

 

     

Public Responsibilities

 

  

3

 

  

All

 

     

Risk

 

  

6

 

  

5 of 6

 

 

 

12

 

   

 

46

   

 

22

   

 

> 215

BOARD MEETINGS

IN 2019

   

STANDING COMMITTEE

MEETINGS IN 2019

   

DIRECTOR SESSIONS IN 2019 WITHOUT MANAGEMENT

PRESENT

 

   

MEETINGS OF  

LEAD DIRECTOR /  

COMMITTEE CHAIRS WITH   

OTHERS OUTSIDE OF BOARD  

MEETINGS   

 

 

 

 

DIVERSITY OF NOMINEES ENHANCES BOARD PERFORMANCE

         

36%

 

~5 YEARS

 

64

 

54%

 

27%

         

NOMINEES WHO

JOINED IN THE

LAST 5 YEARS

  MEDIAN TENURE   MEDIAN AGE  

NOMINEES WHO ARE
DIVERSE BY RACE,
GENDER OR SEXUAL
ORIENTATION

 

 

 

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

 

 

6        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

EXECUTIVE SUMMARY—CORPORATE GOVERNANCE HIGHLIGHTS

 

Director Nominees

 

 

DIRECTOR NOMINEES

 

 

         
               COMMITTEE MEMBERSHIP       

OTHER

CURRENT U.S.-

LISTED PUBLIC

BOARDS(a)

 

 

NAME/AGE/INDEPENDENCE  

 

 

  DIRECTOR  
  SINCE  

 

 

  OCCUPATION/CAREER  

  HIGHLIGHTS  

 

 

  AUD  

 

 

  COMP  

 

 

  GOV  

 

 

  PRC    

 

 

  RISK

    
                 

LOGO

 

 

     

David Solomon, 58

Chairman and CEO

 

 

October

2018

 

 

Chairman & CEO,

The Goldman Sachs Group, Inc.

 

                         

0

 

             

LOGO

 

 

   

Adebayo Ogunlesi, 66

Independent Lead Director

 

 

October

2012

 

 

Chairman & Managing Partner, Global Infrastructure Partners

 

 

Ex-Officio

 

 

C

 

 

Ex-Officio

 

     

2

 

                       

LOGO

 

 

   

 

Michele Burns, 62

Independent

 

 

 

 

October

2011

 

 

 

Retired

(Chairman & CEO, Mercer LLC;

CFO of each of: Marsh & McLennan

Companies, Inc., Mirant Corp. and

Delta Air Lines, Inc.)

 

     

C

 

 

 

     

 

     

3

 

                       

 

 

LOGO

 

 

   

 

 

Drew Faust, 72

Independent

 

 

 

 

July

2018

 

 

Professor, Harvard University

(Retired, President, Harvard University)

 

     

 

 

 

 

 

       

0

 

                       

LOGO

 

 

   

Mark Flaherty, 60

Independent

 

 

December

2014

 

 

Retired

(Vice Chairman, Wellington

Management Company)

 

 

 

     

 

     

 

     

0

 

                       

LOGO

 

 

   

Ellen Kullman, 64

Independent

 

 

December

2016

 

 

President & CEO, Carbon, Inc.

(Retired, Chairman & CEO, E.I. du Pont

de Nemours and Company)

 

     

 

 

 

 

C

 

       

3

 

                       

LOGO

 

 

   

Lakshmi Mittal, 69

Independent

 

 

June

2008

 

 

Chairman & CEO,

ArcelorMittal S.A.

 

     

 

 

 

 

 

       

1

 

                       

LOGO

 

 

   

Peter Oppenheimer, 57  

Independent

 

 

March

2014

 

 

Retired

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

 

 

C

 

     

 

     

 

     

0

 

                       

LOGO

 

 

   

Jan Tighe, 57

Independent

 

 

December

2018

 

 

Retired

(Vice Admiral, United States Navy)

 

 

 

     

 

     

 

     

2

 

                       

LOGO

 

 

   

David Viniar, 64

Non-Employee

 

 

January

2013

 

 

Retired

(CFO, The Goldman Sachs Group, Inc.)

 

                 

 

     

1

 

                       

LOGO

 

 

     

Mark Winkelman, 73

Independent

 

 

December

2014

 

 

Private investor

 

 

 

     

 

     

C

 

     

0

 

 

 

(a)

As per SEC rules.

 

C

Designates Committee Chairs.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        7


Table of Contents

CORPORATE GOVERNANCE—CORPORATE GOVERNANCE SNAPSHOT

 

 

Corporate Governance

Corporate Governance Snapshot

 

    Independent Lead Director with expansive duties

 

    Regular executive sessions of independent and non-employee directors

 

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

 

    Independent director focus on executive succession planning

 

    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 (enhanced in 2019)

 

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

 

    Active, year-round shareholder engagement process, whereby we, including our Lead Director, meet and speak with our shareholders and other key stakeholders

 

    Board and Committee oversight of sustainability and other environmental, social and governance 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)  

 

    Proxy access right for shareholders, which right was adopted proactively after engagement with shareholders. In addition, shareholders are welcome to continue to recommend director candidates for consideration by our Governance Committee  

 

    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 (as applicable), which require significant long-term share holdings by our NEOs  

 

    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 for a director’s entire tenure on our Board. Directors are not permitted to hedge or pledge these RSUs  
 

 

 

LOGO

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 All independent directors on Governance Committee GOVERNANCE PRACTICES Candid self-evaluation Oversight of CEO/ management performance Board/management succession planning YEAR-ROUND ENGAGEMENT Broad range of stakeholders Proactive outreach Responsiveness to areas of focus 2019 FIRM & BOARD ENGAGEMENT IR meetings with >35% Common Stock Lead Director meetings with >20% Common Stock ACTIVE ENGAGEMENT RANGE OF TOPICS Corporate governance Firm performance Executive compensation Sustainability Reputational risk FEEDBACK PROVIDED Stakeholder feedback informs Board/Committee discussions

 

8        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our 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.

 

 

Item 1. Election of Directors

 

 

  OUR 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.

 

 

DIVERSITY OF SKILLS AND EXPERIENCES

   
Financial services industry   Complex / Regulated industries  

Global experience /

Established & growth markets

 

Human Capital Management /

Talent development

   
Academia   Technology / Cybersecurity   Audit, tax, accounting &
preparation of financial
statements
  Compliance
   
Operations  

Public policy & regulatory affairs

/ Military

  Risk & financial products   Sustainability / ESG
 

 

Risk management

  Public company / Corporate governance

 

CORE QUALIFICATIONS AND EXPERIENCES

 

 

Financial literacy

  Demonstrated management/leadership ability
 

 

Strategic thinking

  Leadership & expertise in their respective fields
 

 

Involvement in educational, charitable

& community organizations

 

 

Extensive experience across public, private and not-for-profit sectors

 

 

Integrity & business judgment

  Reputational focus

 

 

 

  Diversity is an important factor in our consideration       
  of potential and incumbent directors     

 

                                  
       

 

OUR NOMINEES(a)

  Our Governance Committee considers a number of demographics and other factors, including race, gender identity, ethnicity, sexual orientation, culture, nationality and work experiences (including military service), 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.

 

 

    LOGO  
   
   
   
   
     
 

(a) Based on self-identified characteristics

 

     

4 WOMEN 1 BLACK 1 INDIAN DESCENT 1 CAREER MILITARY SERVICE 3 NON-U.S. OR DUAL CITIZENS

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        9


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

Director Tenure: A Balance of Experience

Our nominees have a median tenure of approximately 5.3 years. This experience balances the institutional knowledge of our longer-tenured directors with the fresh perspectives brought by our newer directors.

 

 

LOGO

No. of Directors 6 5 4 3 2 1 0 <5 YEARS 4 DIRECTORS 5-10 YEARS 6 DIRECTORS 5.3 years median tenure 10+ YEARS 1 DIRECTOR Years of Experience

 

 

 

  Comprehensive Re-Nomination Process     

 

  
     
  Our Governance Committee appreciates 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 judgment, skills, qualifications and experience (including that gained due to tenure on our Board) continue to contribute to the success of our Board and our firm;

 

Feedback from the annual Board evaluation and related 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 at our 2019 Annual Meeting of Shareholders;

 

Outside board and other affiliations, including time commitment and 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 2021 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.

Biographical information about our director nominees follows. This information is current as of March 1, 2020 and has been confirmed by each of our director nominees for inclusion in our Proxy Statement. There are no family relationships among any of our directors and executive officers.

 

10        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

           
 

LOGO                     

 

David M. Solomon, 58        

 

Chairman and CEO

 

 

Director Since: October 2018

 

Other U.S.-Listed Company Directorships

 

    Current: None

     Former (Past 5 Years): None

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
          
     

 

     Engaged and motivating leader who embodies our firm’s culture: With 20 years of leadership roles at our firm, leverages firm-specific and industry knowledge to lead the firm and its people, develop the firm’s strategy, embody the “tone at the top” and help protect and enhance our firm’s culture, including through his commitment to talent development and diversity of our workforce

    Strategic thinker with deep business and industry expertise: Utilizes deep familiarity with all aspects of the firm’s businesses, including from his experience as President and Chief Operating Officer, to develop and articulate the firm’s strategic vision, assess attendant risks and guide the firm’s growth, in each case providing his insights to our Board and keeping directors apprised of significant developments in our business and industry

    Actively engaged with stakeholders as a primary face of our firm: Committed to engaging with our external stakeholders, draws upon his extensive interaction with our clients, investors and other stakeholders to communicate feedback and offer insight and perspective to our Board

 

 
     
     
     

 

CAREER HIGHLIGHTS

 

    Goldman Sachs

»   Chairman (January 2019 – Present) and Chief Executive Officer (October 2018 – Present)

 

»   President and Chief or Co-Chief Operating Officer (January 2017 – September 2018)

 

»    Co-Head of the Investment Banking Division (July 2006 – December 2016)

 

»   Various positions of increasing seniority, including Global Head of the Financing Group (September 1999 – July 2006)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Trustee, Hamilton College

    Member, Board of Directors, Robin Hood Foundation

 

EDUCATION

 

     Graduate of Hamilton College

 

 

 

 

 

LOGO

 

Adebayo O. Ogunlesi, 66  

 

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 25 years of leadership 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

    Broad board and governance expertise: Serves 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)

    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, Global Advisory Council, Harvard University

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

    Member, Dean’s Advisory Board and Leadership Council of New York, Harvard Law School

 

EDUCATION

 

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

 

 

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        11


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

           
 

LOGO

 

M. Michele Burns, 62                

 

Independent

 

 

Director Since: October 2011

 

GS Committees

 

    Compensation (Chair)

     Governance

    Risk

 

Other U.S.-Listed Company Directorships

 

    Current: Anheuser-Busch InBev; Cisco Systems, Inc.;
Etsy, Inc.

     Former (Past 5 Years):
Alexion Pharmaceuticals, Inc.

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
          
     

 

     Leadership, compensation, governance and risk expertise: Leverages current and former service on the boards of directors and board committees (including compensation 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

 

     Advisory Council Member, former Center Fellow and Strategic Advisor, Stanford University Center on Longevity

    Former Board Member and Treasurer, Elton John AIDS Foundation

 

EDUCATION

 

     Graduate of University of Georgia (including for Masters)

 

 

 

                         
 

LOGO

 

Drew G. Faust, 72                    

 

Independent

 

 

Director Since: July 2018

 

GS Committees

 

    Compensation

     Governance

    Public Responsibilities

 

Other U.S.-Listed Company Directorships

 

    Current: None

     Former (Past 5 Years): Staples, Inc.

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
          
     

 

     Human capital and diversity: As former President of Harvard University, well-positioned to provide insight on the firm’s strategies relating to diversity, recruiting and retention

     Leadership and governance: Current and prior service on the boards of directors of public and/or not-for-profit entities provides additional perspective on governance

     Operations and sustainability: During her tenure at Harvard University she, among other things, broadened the university’s international reach, promoted collaboration across disciplines and administrative units and developed and implemented various sustainability initiatives, including Harvard’s Climate Action Plan

 

 
     
       
     

 

CAREER HIGHLIGHTS

 

     Harvard University

»   President Emeritus and Arthur Kingsley Porter University Professor (January 2019 – Present)

 

»   President (July 2007 – June 2018)

 

»   Lincoln Professor of History (January 2003 – December 2018)

 

»   Founding Dean, Radcliffe Institute for Advanced Study (January 2001 – July 2007)

    University of Pennsylvania (1975 – 2000); various faculty positions including as the Annenberg Professor of History and the Director of the Women’s Studies Program

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Member, Educational Advisory Board, John Simon Guggenheim Memorial Foundation

    Member, American Academy of Arts & Sciences

     Former Member, Board of Directors, The Broad Institute Inc.

     Former Member, Board of Directors, Harvard Management Company Inc.

 

EDUCATION

 

     Graduate of Bryn Mawr College and the University of Pennsylvania (Masters and Ph.D.)

 

 

 

12        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

           
 

LOGO

 

Mark A. Flaherty, 60            

 

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 to provide informed perspective to our Board and committees

 

 
     
     
     

 

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

 

 

 

                         
 

LOGO

 

Ellen J. Kullman, 64          

 

Independent

 

 

Director Since: December 2016

 

GS Committees

 

    Public Responsibilities (Chair)

     Compensation

    Governance

 

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

    Focus on reputational risk and sustainability/ESG matters: Draws upon experiences gained from DuPont and other board roles, including in connection with her role as Chair of our Public Responsibilities Committee

 

 
     
       
     

 

CAREER HIGHLIGHTS

 

     Carbon, Inc., a digital manufacturing platform

»   President and CEO (November 2019 – Present)

 

    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 (October 2008 – December 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

 

 

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        13


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

           
 

LOGO

 

Lakshmi N. Mittal, 69                

 

Independent

 

 

 

Director Since: June 2008

 

GS Committees

 

     Compensation

    Governance

     Public Responsibilities

 

Other U.S.-Listed Company Directorships

 

    Current: ArcelorMittal S.A.

     Former (Past 5 Years): None

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
          
     

 

     Leadership, business development and operations: Founder of Mittal Steel Company and Chairman and Chief Executive Officer of ArcelorMittal, 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 with 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

    Member, Global Advisory Council, Harvard University

 

EDUCATION

 

     Graduate of St. Xavier’s College in India

 

 
       

 

 

 

LOGO

 

Peter Oppenheimer, 57            

 

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 Chair, 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

 
         

 

14        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Our Directors

 

           
 

LOGO

 

Jan E. Tighe, 57                    

 

Independent

 

 

 

Director Since: December 2018

 

GS Committees

 

     Audit

    Governance

     Risk

 

Other U.S.-Listed Company Directorships

 

    Current: Huntsman Corporation; Progressive Corporation

     Former (Past 5 Years): None

 

     

KEY EXPERIENCE AND QUALIFICATIONS    

   
          
     

 

      Technology and technology risk: Over 20 years of senior executive experience in cybersecurity and information technology, which experience provides perspective to aid in oversight of the firm’s deployment of technology and the management of technology risk

     Strategic planning and operations: Experience in strategic planning, risk assessment and execution of naval strategies across a variety of positions, including as a Fleet Commander and as a university president

     Leadership and governance: Retired Vice Admiral who served in numerous leadership roles in the U.S. Navy and with the National Security Agency, who served on the U.S. Navy’s Corporate Board and now serves on the boards of directors and board committees of other public companies and not-for-profit entities

 

 
     
     
     

 

CAREER HIGHLIGHTS

 

     United States Navy, Vice Admiral and various positions of increasing authority and responsibility (1980 – 2018), including:

»   Deputy Chief of Naval Operations for Information Warfare and Director, Naval Intelligence (2016 – 2018)

 

»   Fleet Commander or Deputy Commander, U.S. Fleet Cyber Command/U.S. Tenth Fleet (2013 – 2016)

 

»   University President, Naval Postgraduate School (2012 – 2013)

 

»   Director, Decision Superiority Division of the Chief of Naval Operations’ Staff (2011 – 2012)

 

»   Deputy Director of Operations, U.S. Cyber Command (2010 – 2011)

 

»   Executive Assistant to General Keith Alexander, U.S. Cyber Command and National Security Agency/Central Security Service (2009 – 2010)

 

»   Commander, National Security Agency/Central Security Service Hawaii (2006 – 2009)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

 

     Trustee, The MITRE Corporation

      Member, Strategic Advisory Committee, Idaho National Labs – National and Homeland Security Directorate

     Board Member, United States Naval Academy Foundation

      Member and Global Security Expert, Strategic Advisory Group, Paladin Capital Group

     Governance Fellow, National Association of Corporate Directors

 

EDUCATION

 

     Graduate of U.S. Naval Academy and Naval Postgraduate School (including for Ph.D.)

 

 

 

                         
 

LOGO

 

David A. Viniar, 64              

 

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

    Insight into our firm’s financial reporting, controls and risk management: As our former CFO, able to provide insights about our risks to our Board and committees

     Capital management processes and assessments: Experience gained through serving as our 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 2020 Annual Meeting of Shareholders  |  Goldman Sachs        15


Table of Contents

CORPORATE GOVERNANCE—ITEM 1. ELECTION OF DIRECTORS

 

Independence of Directors

 

           
 

 

LOGO

 

Mark O. Winkelman, 73

 

Independent

 

 

 

Director Since: December 2014

 

GS Committees

 

     Risk (Chair)

    Audit

     Governance

 

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 current service on the board of our subsidiary, Goldman Sachs International (GSI), including as the former chair of the GSI risk committee

     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, 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

 

 
         
       

 

 

INDEPENDENCE OF DIRECTORS

 

 

 

  9 of 11 director nominees are independent    

  
     
  Our Board determined, upon the recommendation of our Governance Committee, that Ms. Burns, Dr. Faust, Mr. Flaherty, Ms. Kullman, Mr. Mittal, Mr. Ogunlesi, Mr. Oppenheimer, Vice Admiral Tighe and Mr. Winkelman are “independent” within the meaning of NYSE rules and our Director Independence Policy. Prior to their retirement from our Board in 2019, each of William W. George and James A. Johnson 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 Annex B: Additional Details on Director Independence.

 

16        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Our Board Committees

 

Structure of our Board and Governance Practices

 

 

 

BOARD OF DIRECTORS

CHAIRMAN AND CEO: DAVID SOLOMON; LEAD DIRECTOR: ADEBAYO OGUNLESI

 

                    

  

                

  

                

  

                    

  

                        

       

AUDIT

COMMITTEE

   COMPENSATION
COMMITTEE
   GOVERNANCE
COMMITTEE
  

PUBLIC
RESPONSIBILITIES
COMMITTEE

 

  

RISK

COMMITTEE

       
4 Members:    4 Members:    9 Members:    3 Members:    6 Members:

All Independent

 

  

All Independent

 

  

All Independent

 

  

All Independent

 

  

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 considers the potential effect of any matter on our reputation.

 

 

 

     AUDIT

 

         

 

     ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

  

 

KEY RESPONSIBILITIES

Peter Oppenheimer(a)

Mark Flaherty

Jan Tighe

Mark Winkelman

 

Adebayo Ogunlesi

(ex-officio)

  

 Audit/Tax/Accounting

 Preparation or oversight of financial statements

 Compliance

 Technology

  

 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

 Prepare the Audit Committee Report

 

(a)

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

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        17


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Our Board Committees

 

 

     COMPENSATION

 

         

 

     ALL INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES
REPRESENTED

  

 

KEY RESPONSIBILITIES

Michele Burns

Drew Faust

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 and 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

Drew Faust

Mark Flaherty

Ellen Kullman

Lakshmi Mittal

Peter Oppenheimer

Jan Tighe

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

Ellen Kullman

Drew Faust

Lakshmi Mittal

 

Adebayo Ogunlesi

(ex-officio)

  

 Reputational risk

 Sustainability / 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 sustainability issues affecting our firm, including through the periodic review of the Sustainability Report

 

 

     RISK

 

         

 

     MAJORITY
     INDEPENDENT

  

 

KEY SKILLS & EXPERIENCES

REPRESENTED

  

 

KEY RESPONSIBILITIES

Mark Winkelman

Michele Burns

Mark Flaherty

Peter Oppenheimer

Jan Tighe

 

Adebayo Ogunlesi

(ex-officio)

 

Non-independent

David Viniar

  

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

 Technology and cybersecurity

 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

 

18        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Board and Committee Evaluations

 

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

2019 Evaluations: A Multi-Step Process 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 QUESTIONNAIRE Provides director feedback on an unattributed basis; feedback from questionnaire informs one-on-one and closed session discussions 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 CLOSED SESSION DISCUSSION Joint closed session discussion of Board and Committee evaluations led by our Lead Director and independent Committee Chairs provides for a synergistic review of Board and Committee performance EVALUATION SUMMARY Summary of Board and Committee evaluations results provided to full 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, evolution of director skill sets, refinements to meeting materials and presentation format, additional Audit and Risk Committee meetings and additional opportunities for exposure to "next generation" leaders of the firm ONGOING FEEDBACK Directors provide ongoing, real-time feedback outside of the evaluation process TOPICS CONSIDERED DURING THE BOARD AND COMMITTEE EVALUATIONS INCLUDE: DIRECTOR PERFORMANCE Individual director performance Lead Director (in that role) Chairman of the Board (in that role) (new in 2019) Each Committee Chair (in that role) BOARD AND COMMITTEE OPERATIONS 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 Executive succession planning process Conduct of meetings, including time allocated for, and encouragement of, candid dialogue Materials and information, including quality, quantity and timeliness of information received from management, and suggestions for educational sessions Shareholder feedback BOARD PERFORMANCE Key areas of focus for the Board Oversight of reputation Strategy oversight, including risks related thereto Consideration of shareholder value Capital planning COMMITTEE PERFORMANCE Performance of Committee duties under Committee charter Oversight of reputation and consideration of shareholder value Effectiveness of outside advisors Identification of topics that should receive more attention and discussion

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        19


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Board Leadership Structure

 

BOARD LEADERSHIP STRUCTURE

 

Strong Independent Lead Director — Combined Chairman-CEO: Why our Structure is Effective

 

We review our Board leadership structure annually. Conducting regular assessments allows our Board to discuss and debate whether the most efficient and appropriate leadership structure is in place to meet the needs of our Board and our firm, which may evolve over time. We are committed to independent leadership on our Board. If at any time the Chairman is not an independent director, our independent directors will appoint an independent Lead Director.

 

 

KEY COMPONENTS OF REVIEW

 

CHAIRMAN-CEO

& LEAD

DIRECTOR

RESPONSIBILITIES

 

 

LOGO

 

 

POLICIES

& PRACTICES TO

ENSURE STRONG

INDEPENDENT

BOARD OVERSIGHT

 

 

LOGO

 

 

 

SHAREHOLDER

FEEDBACK &

VOTING RESULTS

REGARDING BOARD

LEADERSHIP

 

 

LOGO

 

FIRM

PERFORMANCE

 

 

LOGO

 

TRENDS &

DEVELOPMENTS REGARDING

LEADERSHIP

STRUCTURE

                                      

 

In December 2019, our Governance Committee conducted its annual review of our Board’s leadership structure. The review considered a variety of factors, including our governance practices and shareholder feedback on our Board and its leadership structure. In addition, our Governance Committee considered feedback on the Chairman of the Board received in connection with the Board evaluation.

 

As a result of this review, our Governance Committee determined that continuing to have Mr. Solomon serve as both Chairman and CEO — working together with a strong independent Lead Director — is the most effective leadership structure for our Board and our firm at this time.

 

Ultimately, we believe that our current leadership structure, together with strong governance practices, creates a productive relationship between our Board and management, including strong independent oversight that benefits our shareholders.

 

We will continue to conduct Board leadership assessments annually. If at any time our Governance Committee determines it would be appropriate to appoint an independent Chairman, it will not hesitate to do so.

 

 

BENEFITS OF A COMBINED ROLE

 

  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 a primary public face of our firm. This structure demonstrates clear accountability to shareholders, clients and others

 

  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 independent directors both at and between Board meetings

 

»  Combining the roles at our firm has been effective in promulgating strong and effective leadership of the firm, particularly in times of economic challenge and regulatory change affecting our industry; this remains important during this time of strategic development and investment for long-term growth

 

 

  EMPOWERED LEAD DIRECTOR WITH EXPANSIVE LIST OF ENUMERATED DUTIES

 

Key Pillars of Lead Director Role

 

     

SETS AND APPROVES

AGENDA FOR BOARD

MEETINGS AND LEADS

EXECUTIVE SESSIONS

 

FOCUSES ON BOARD

EFFECTIVENESS,

COMPOSITION

AND CONDUCTING

EVALUATIONS

 

ACTS AS PRIMARY

BOARD CONTACT

FOR SHAREHOLDER

ENGAGEMENT AND

ENGAGES WITH

REGULATORS

 

 

SERVES AS LIAISON

BETWEEN INDEPENDENT

DIRECTORS AND

CHAIRMAN/

MANAGEMENT

 

20        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Board Leadership Structure

 

 

     Powers and Duties of our Independent Lead Director

   

 

  Provides independent leadership

 

  Sets agenda for Board meetings, working with our Chairman (including adding items to and approving the agenda) and approving the form and type of related materials, as well as reviewing and concurring in the agendas for each Committee meeting

 

  Approves the schedule for Board and committee meetings

 

  Presides at executive sessions of the Independent Directors

 

  Calls meetings of the Board, including meetings of the Independent Directors

 

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

 

  Engages with the Independent Directors and non-employee directors at and between Board and Committee meetings, including:

 

» to identify matters for discussion, including for discussion at executive sessions of the Independent Directors

 

» to facilitate communication with the Chairman (as set forth below)

 

» one-on-one engagement regarding the performance and functioning of the collective

 

 

 

   Board, individual director performance and other matters as appropriate

 

  Serves as an adviser to the Chairman, including by:

 

» engaging with the Chairman between Board meetings

 

» facilitating communication between the Independent Directors and the Chairman, including by presenting the Chairman’s views, concerns and issues to the Independent Directors as well as assisting with informing or engaging non-employee directors, as appropriate

 

» raising to the Chairman views, concerns and issues of the Independent Directors, including decisions reached, and suggestions made, at executive sessions, in each case as appropriate

 

  Oversees the 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 the firm

 

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

 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 

    STRONG GOVERNANCE PRACTICES SUPPORT

    INDEPENDENT BOARD OVERSIGHT

 

 

 

 

STAKEHOLDER FEEDBACK & ENGAGEMENT

 

  Nine independent directors and one non-employee director, the majority of which have executive-level experience

 

  Independent and engaged Chairs of all standing Committees

 

  Regular executive sessions of independent directors chaired by Lead Director supplemented by additional sessions of non-employee directors without management present

 

  All directors may suggest inclusion of additional subjects on agendas and any director may call an executive session

 

  Annual Board and Committee evaluations that include feedback on individual director performance

 

  Independent director participation and oversight of key governance processes, such as CEO performance, compensation and succession planning

 

  All directors free to contact any employee of the firm directly

 

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

 

 

  We have generally received positive stakeholder feedback on the nature of our Lead Director role and our annual leadership structure review

 

» In considering the strength of our Board leadership structure, many investors cite our Lead Director’s extensive engagement with shareholders and the insight into the Board’s perspectives and focus areas provided by the letter in our proxy statement that comes from our Lead Director

 

  Our Lead Director, Adebayo Ogunlesi, has engaged with the firm’s shareholders and other key stakeholders, including our regulators, to discuss a variety of topics, including our Board leadership structure and his responsibilities as Lead Director, Board effectiveness, the Board’s independent oversight of strategy, Board culture and Board and management succession planning

 

» In 2019, Mr. Ogunlesi met with investors representing over 20% of our shares outstanding. He has regularly conducted engagement since becoming Lead Director, generally meeting with individuals representing key investors and proxy advisory firms

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        21


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Year-Round Review of Board Composition

 

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, work and other 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

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

 

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.

 

22        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Director Education

 

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 revenue-producing 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 Audit and Risk Committee orientation sessions 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 — 2019 Meetings

Our Board and its Committees met frequently in 2019.

 

     

 

2019         
MEETINGS         

 

      

 

 

 

Board

 

 

  

 

 

12         

 

 

    

 

LOGO

58 TOTAL BOARD AND COMMITTEE MEETINGS IN 2019

 

 

 

 

 

 

 

Audit

 

 

  

 

17         

 

 

 

 

 

Compensation

 

 

  

 

6         

 

 

 

 

 

Governance

 

 

  

 

6         

 

 

 

 

 

Public Responsibilities

 

 

  

 

5         

 

 

 

 

 

Risk

 

 

  

 

12         

 

 

 

 

 

Executive Sessions of Independent Directors without Management(a)

 

 

  

 

17         

 

 

  

 

 

 

Additional Executive Sessions of Non-Employee Directors without Management(b)

 

 

  

 

5         

 

 

  

 

(a)

Chaired by our Lead Director.

 

(b)

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 2019. Overall attendance at Board and Committee meetings during 2019 was over 99% for our directors as a group.

We encourage our directors to attend our annual meetings. All of our directors attended the 2019 Annual Meeting.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        23


Table of Contents

CORPORATE GOVERNANCE—STRUCTURE OF OUR BOARD AND GOVERNANCE PRACTICES

 

Commitment of our Board

 

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 COLLABORATION

 

Frequent interactions with each
other, senior management and key
employees around the globe on
topics including strategy,
performance, risk management,
culture and talent development

 

 

STAKEHOLDER ENGAGEMENT

 

Regular engagement with key
stakeholders, including regulators,
and 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 each Board and Committee meeting.

 

In carrying out their leadership roles during 2019:

 

      

 

Lead Director

Adebayo Ogunlesi

 

 

 

Risk Chair

Mark Winkelman

 

 

 

Public Responsibilities

Chair

Ellen Kullman(a)

 

 

 

Compensation Chair

Michele Burns

 

 

 

Audit Chair

Peter Oppenheimer

 

 

 

  

 

 

 

Over 80 meetings

 

 

Over 30 meetings

 

 

 

Over 10 meetings

 

 

 

Over 45  meetings

 

 

 

Over 60 meetings

 

       
   

 

Includes meetings with, as applicable: CEO, COO, CFO, Secretary to the Board, General Counsel, Chief Risk Officer, Director of Internal Audit and other key Internal Audit employees, Controller, Global Head of HCM, Director of Investor Relations, Head of Employee Experience, Global Head of Executive Compensation, Global Head of Corporate Engagement, key Sustainable Finance Group employees, Shareholders, Regulators, Independent Compensation Consultants, Director Search Firm, Independent Auditors

 

       
 

 

(a)  Chair since May 2019.

 

         

 

 

24        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—BOARD OVERSIGHT OF OUR FIRM

 

Key Areas of Board Oversight

 

Board Oversight of our Firm

 

  KEY AREAS OF BOARD OVERSIGHT

Our Board discusses and receives regular updates on a wide variety of matters affecting our firm. 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 our communities in order to create long-term, sustainable value for our shareholders. Central to this is our Board’s oversight of management’s efforts to ensure that the firm’s cultural expectations are appropriately communicated and embraced throughout the firm.

 

 

LOGO

STRATEGY RISK MANAGEMENT CEO PERFORMANCE EXECUTIVE SUCCESSION PLANNING FINANCIAL PERFORMANCE & REPORTING CULTURE CONDUCT

 

          CONSIDERATION OF OUR REPUTATION UNDERSCORES OUR BOARD AND COMMITTEE OVERSIGHT

 

 

strategy

 

LOGO

                                                                                                                                                     
         
 

 

   Our Board oversees and provides advice and guidance to senior management on the formulation and implementation of the firm’s strategic plans, including the development of growth strategies by our senior management team.

 
 

 

»  This occurs year-round through presentations and discussions covering firmwide, divisional and regional strategy, business planning and 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.

 

 
    

SPOTLIGHT ON STRATEGIC PLANNING

 

 Throughout 2019, our Board engaged on an ongoing basis with our CEO, COO and CFO, as well as other key members of senior management and the control side, on management’s development of our growth-focused long-term strategy and our financial targets as announced at our inaugural Investor Day in January 2020.

»  This took various forms, ranging from high-level discussions regarding strategic direction, reviews of existing and new business initiatives as well as organic and inorganic growth opportunities and a focus on the quality and diversity of our people, each of which was aligned with our goal of long-term value creation for our shareholders and grounded by considerations such as risk management, culture and reputation.

 

 Our Board will continue to receive regular updates from, and provide advice to, management as they execute on the firm’s strategy.

 

 
   

 

Risk Management

 

LOGO

                                                                                                                                                     
         
 

 

   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. In doing so, we endeavor not to undertake risks that could materially impair our firm, including our capital and liquidity position, ability to generate revenues and reputation.

 
      

 

   Management is responsible for the day-to-day identification, assessment, 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, which includes setting the types and levels of risk the firm is willing to take. 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.

 

 

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        25


Table of Contents

CORPORATE GOVERNANCE—BOARD OVERSIGHT OF OUR FIRM

 

Key Areas of Board Oversight

 

REPUTATIONAL RISK MANAGEMENT

               

    

   

 

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

 

  Information and cybersecurity risk, third-party risk and business resilience risk, 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 from the Firmwide Reputational Risk Committee regarding certain transactions that may present heightened reputational risk

 

  Sustainability / 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

 

   
           
   

 

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 technology-related risks, risk assessment and risk management practices

 

   

 

GOVERNANCE COMMITTEE RISK MANAGEMENT OVERSIGHT INCLUDES:

 

  Board composition and Board and executive succession

      
                    

Continued Focus on Reputational Risk Management

 

Over the past several years, our firm has taken a number of steps that have enhanced our Board’s and our firm’s oversight of reputational risk, including:

 

  Development and implementation of a Reputational Risk Framework and formation of a management-level Firmwide Reputational Risk Committee and control-side “regional vetting groups” to review transactions with potential heightened reputational risks, as well as numerous transaction- and client-level controls embedded in our firm’s multi-faceted committee and working group structure

 

  Training programs, including our Chairman’s Forum and Control Side Learning Initiative, which together aim to empower all employees to defend against transactional, operational and reputational risks

 

  Implementation of a comprehensive Enterprise Risk Framework, including formation of a management-level Enterprise Risk Committee, a common firmwide risk taxonomy and risk dashboard, a revised Risk Appetite Statement that addresses both financial and non-financial risks and the enhancement of our “three lines of defense” structure

 

 

26        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

CORPORATE GOVERNANCE—BOARD OVERSIGHT OF OUR FIRM

 

Key Areas of Board Oversight

 

CEO PERFORMANCE

      

LOGO

                                                                                                                                                     
         

 

  Under the direction of our Lead Director, our Governance Committee annually evaluates CEO performance.

 

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

 

  The Committee reviews the results of our CEO’s evaluation under our “360 degree” review process (360° Review Process, as described further in Compensation MattersCompensation Discussion and Analysis—How Our Compensation Committee Makes Decisions) and also assesses our CEO’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.

 

EXECUTIVE SUCCESSION PLANNING

      

LOGO

                                                                                                                                                     
         

 

   Our Governance Committee has long utilized 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 both on a long-term and an emergency basis.

 

   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.

 

   Even after our recent executive transitions, succession planning remains a priority for our Governance Committee. The Committee has worked with Mr. Solomon to ensure an appropriate emergency succession protocol and will continue to work with Mr. Solomon on the development and ongoing refinement of our longer-term succession plan.

 

 

 

 

         LOGO                     

Interaction with senior management in a variety of settings, including Board meetings and preparatory meetings, during visits to our offices around the world and at client-related events Plan reviewed by our Governance Committee with our CEO at least annually 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 ALWAYS DEVELOPING NEXT GENERATION OF LEADERS

 

 

 

 

FINANCIAL PERFORMANCE & REPORTING

      

LOGO

                                                                                                                                                     
         

 

 

   Our Board, including through its Committees, is continually kept apprised by management 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 update 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.

 

»   For example, during 2019, our Board and Audit Committee oversaw management’s development of the firm’s new external segment presentation as well as the financial targets announced at Investor Day, in each case consistent with the firm’s long-term strategy.

 

   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 audit partner (see Audit Matters—Item 3. Ratification of PwC as our Independent Registered Public Accounting Firm for 2020).

 

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        27


Table of Contents

CORPORATE GOVERNANCE—BOARD OVERSIGHT OF OUR FIRM

 

Key Areas of Board Oversight

 

culture

 

LOGO

                                                                                                                                                     
         

 

  Management’s role in shaping the firm’s culture is critical, and our Board’s oversight of firm culture is an important element of its responsibilities, in each case particularly because our people are our greatest asset. Our culture is core to our Board’s and Committees’ focus on the firm’s reputation and to management’s operation of the firm responsibly for the long-term.

 

»   We expect our people to maintain high ethical standards in everything they do. It is only with the determination and dedication of our people that we can serve our clients, generate long-term value for our shareholders and contribute to economic progress.

 

  Our Board holds senior management accountable for embodying an appropriate “tone at the top” and for 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.

 

»   Oversight of culture takes many forms, and includes oversight of strategy and risk tolerance, review of governance policies and practices, the receipt of governance metrics, regular discussions with the firm’s Compliance, Legal, Risk and Internal Audit functions, and oversight of CEO and senior management performance and compensation.

 

»   These are also topics on which our firm regularly engages with our shareholders, regulators and other stakeholders.

 

 
       

 

  Our culture has been a cornerstone of our business and performance throughout our history. Our 14 Business Principles (available on our website at www.gs.com), which were originally codified in 1979, outline our commitment to our clients and our cultural expectations, including how teamwork, excellence, personal initiative and accountability are integral to our long-term success. These principles continue to guide us and were recently distilled into our Core Values, which inform everything that we do.

 

  Our Core Values are embedded in, and regularly reinforced at, every step of our peoples’ careers, from onboarding to training, performance development, compensation and promotion processes.

 

  These efforts are underscored by our focus on cultivating and sustaining a diverse work environment and workforce, which is critical to our ability to meet the unique needs of our diverse client base and the communities in which we operate, as well as our commitment to diversity more broadly as stewards of the global capital markets.

 

»   For example, during 2019 the firm announced new initiatives aimed at increasing the representation of diverse communities at all levels across the firm, including aspirational goals to increase the representation of analyst and entry-level associate new joiners to the firm, as well as other talent development programs and diversity retention initiatives. In addition to these internal initiatives, the firm also recently announced a commitment to only underwrite IPOs in certain jurisdictions for companies with at least one diverse board member.

 

   
    

 

conduct

 

LOGO

                                                                                                                                                     
         

 

  We strive to maintain the highest standards of ethical conduct at all times, consistent with our Business Principles and our Core Values. For example:

 

»   Our Board regularly receives governance metrics, including metrics focused on conduct, controls and business integrity matters as well as attrition and complaints, and engages in regular discussions with the Compliance, Legal, Risk and Internal Audit functions.

 

»   Our Board also expects management to examine and to report to it on “lessons learned” from events at our firm or in our industry, as appropriate.

 

»   The new Performance Assessment Framework not only assesses the firm’s financial performance, but also takes into account a wide array of non-financial factors.

 

  As part of our ongoing commitment to dialogue, education and formal training, the firm offers a range of programs focused on our business standards and conduct.

 

 
       

 

Our Code of Business Conduct and Ethics (available on our website at www.gs.com) outlines our shared responsibility to our clients, our colleagues and our communities.

 

   
    

 

28        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

STAKEHOLDER ENGAGEMENT—OUR APPROACH

 

 

Stakeholder Engagement

 

      

   Commitment to Active Engagement with our Shareholders and Other Stakeholders

                                                                        
 
 

 

Stakeholder 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

We engage on a year-round basis with a wide range of stakeholders, including shareholders, ESG rating firms, fixed income investors, proxy advisory firms, prospective shareholders and thought leaders, among others. We also conduct additional targeted outreach ahead of our annual meeting each year, and otherwise as needed.

Firm engagement is led by our Investor Relations team, including targeted outreach and open lines of communication for inbound inquiries. Board-level engagement is led by our Lead Director, who meets regularly with shareholders and other key stakeholders, and may include other directors as appropriate. Feedback is provided to all directors from these interactions to inform Board and Committee work.

Depth of Engagement

Corporate governance represents only one component of our broader approach to stakeholder engagement. We take a holistic, comprehensive approach when communicating with shareholders. Discussions on corporate governance matters are often part of a broader dialogue covering corporate strategy, business performance, risk oversight and other key themes. We continued to conduct year-round, proactive engagement on corporate governance matters in 2019:

 

 

Targeted outreach to top 200 shareholders ahead of 2019 Annual Meeting

 

 

IR met with shareholders representing more than 35% of Common Stock outstanding during 2019

 

 

Lead Director met with 23 investors in 2019, representing over 20% of Common Stock outstanding

2019 engagement covered:

 

 

LOGO

BUSINESS PERFORMANCE STRATEGIC PRIORITIES CORPORATE GOVERNANCE OPERATIONAL GOALS REGULATORY OUTLOOK RISK MANAGEMENT APPROACH TO SUSTAINABILITY TALENT STRATEGY EXECUTIVE COMPENSATION BOARD GOVERNANCE SUCCESSION PLANNING TONE AT THE TOP

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        29


Table of Contents

STAKEHOLDER ENGAGEMENT—SPOTLIGHT ON SUSTAINABILITY

 

 

Spotlight on Sustainability

 

We believe executing a best-in-class sustainability strategy is central to our long-term success.

Sustainability is top of mind for our clients and front and center for the next generation of talent. We address sustainability in various ways, including through:

 

   

Sustainable finance — Core to how we serve our clients, we are committed to driving commercial solutions to advance this focus. This is reflected in the launch of our new Sustainable Finance Group and our new $750 billion sustainable finance target.

 

 

   

Integration of sustainability across our firm — Sustainability is central to how we manage our operations and invest in our people and our communities.

 

We believe that successfully delivering on our sustainability strategy will help drive returns for our shareholders.

More information can be found in our annual Sustainability Report, available at www.gs.com/sustainability-report. Our 2019 report will be available at the end of April 2020.

 

Our Commitment to Sustainable Finance

In December 2019, we announced a new target of $750 billion in sustainable finance by 2030, focusing on climate transition and inclusive growth. This commitment encompasses financing, investing and advisory activity spanning nine sustainable growth themes:

 

 

LOGO

Climate Transition Clean Energy Sustainable Transport Sustainable Food & Agriculture Waste & Materials Ecosystem Services Inclusive Growth Accessible & Innovative Healthcare Financial Inclusion Accessible & Affordable Education Communities

To better deliver our leading expertise and capabilities in these areas to our clients, we formed a new Sustainable Finance Group to partner with our various business divisions to deepen capabilities and knowledge in sustainable finance, as well as to help drive our efforts toward our commitment.

Ongoing Focus on Environmental & Social Risk Management

In connection with our sustainable finance commitment, we also enhanced our Environmental Policy Framework guidelines for carbon intense sectors to reflect that we will:

 

   

No longer engage in direct financing of new thermal coal development (new power plants and coal mines);

 

   

Engage with clients to help them diversify away from thermal coal and reduce carbon emissions with the goal of helping their climate transition; and

 

   

Not directly finance new upstream oil exploration and production in the Arctic, including in the Arctic National Wildlife Refuge.

Enhancements in our Operations and Reporting

We have also broadened our reporting efforts and operational goals over the past year, including:

 

   

Reporting in our Sustainability Report for the first time under the Sustainability Accounting Standards Board (SASB) (the first U.S. bank to do so);

 

   

Announcing our support for the Task Force on Climate-related Financial Disclosures (TCFD) and planning to further enhance our disclosure through a TCFD-aligned report; and

 

   

Expanding our 2025 sustainable operational goals, including with respect to carbon neutrality for business travel, renewable energy procurement, reductions in usage of plastics and other disposables, and increased spend with diverse vendors.

 

30        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 NEO Compensation Determinations

 

Compensation Matters

Compensation Discussion and Analysis

This CD&A describes our executive compensation philosophy and the process by which our Compensation Committee makes executive compensation decisions, each of which is designed to support our strategic objectives and the long-term interests of our shareholders. Our 2019 NEOs are:

 

LOGO

 

David M. Solomon

 

Chairman and CEO

  

LOGO

 

John E. Waldron

 

President and COO

  

LOGO

 

Stephen M. Scherr

 

CFO

  

LOGO

 

John F.W. Rogers

 

EVP

  

LOGO

 

Karen P. Seymour

 

EVP and General Counsel

 

2019 NEO COMPENSATION DETERMINATIONS

The following table shows our Compensation Committee’s determinations regarding our NEOs’ 2019 annual compensation as well as 2018 information for those individuals who were NEOs in that year (dollar amounts shown in millions). For our Executive Leadership Team, 2019 was the first year that each served in their respective roles for the full year.

This table is different from the SEC-required 2019 Summary Compensation Table on page 48.

 

           
    YEAR        SALARY
 ($)(a)
    ANNUAL VARIABLE
COMPENSATION ($)
    TOTAL
($)
         

EQUITY-BASED

AWARDS

 
   

 

  CASH

   

 

  PSUS(b)

   

 

  RSUS(b)

   

 

% OF ANNUAL
VARIABLE
COMPENSATION

    

 

    % OF TOTAL        

 

EXECUTIVE LEADERSHIP TEAM

 

                
                   

David M. Solomon

Chairman and CEO

 

 

 

 

2019   

 

 

 

 

 

 

2.00

 

 

 

 

 

 

7.65

 

 

 

 

 

 

17.85 

 

 

 

 

 

 

 

 

 

 

 

 

27.50

 

 

 

 

 

 

 

 

 

 

 

70

 

 

  

 

 

 

65    

 

 

 

 

 

 

2018   

 

 

 

 

 

 

1.89

 

 

 

 

 

 

5.70

 

 

 

 

 

 

15.41 

 

 

 

 

 

 

 

 

 

 

 

 

23.00

 

 

 

 

 

 

 

 

 

 

 

73

 

 

  

 

 

 

67    

 

 

                   

John E. Waldron

President and COO

 

 

 

 

2019   

 

 

 

 

 

 

1.85

 

 

 

 

 

 

9.06

 

 

 

 

 

 

13.59 

 

 

 

 

 

 

 

 

 

 

 

 

24.50

 

 

 

 

 

 

 

 

 

 

 

60

 

 

  

 

 

 

55    

 

 

 

 

 

 

2018   

 

 

    1.59       6.81       11.60              20.00    

 

 

 

 

    63        58      
                   

Stephen M. Scherr

CFO

 

 

 

 

2019   

 

 

 

 

 

 

1.85

 

 

 

 

 

 

8.26

 

 

 

 

 

 

12.39 

 

 

       

 

 

 

22.50

 

 

 

 

 

 

 

 

 

 

 

60

 

 

  

 

 

 

55    

 

 

 

 

 

 

 

2018   

 

 

 

 

 

 

 

 

 

1.56

 

 

 

 

 

 

 

 

 

6.08

 

 

 

 

 

 

 

 

 

10.36 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.00

 

 

 

 

     

 

 

 

 

63

 

 

 

 

  

 

 

 

 

58    

 

 

 

 

OTHER NEOS

                  
                   

John F.W. Rogers

EVP

    2019          1.50       4.00      

1.50 

(new) 

 

 

    4.50       11.50    

 

 

 

 

    60        52      
                   

Karen P. Seymour

EVP and General Counsel

    2019          1.50       3.00      

1.12 

(new) 

 

 

    3.38       9.00    

 

 

 

 

    60        50      

(a) Each of Messrs. Solomon, Waldron and Scherr served in more than one role during 2018. Mr. Solomon became CEO, and Mr. Waldron became COO, in October 2018 and Mr. Scherr became CFO in November 2018. The 2018 salary for each of these individuals was increased at the time of their respective change in role/title during 2018 and their compensation for each year reflects length of service in prior and new roles.

(b) The number of PSUs or RSUs awarded as part of our NEOs’ 2019 annual compensation was determined by reference to the closing price of our Common Stock on the grant date ($249.72 on January 16, 2020). This resulted in grants as follows: Mr. Solomon—71,481 PSUs; Mr. Waldron—54,421 PSUs; Mr. Scherr—49,616 PSUs; Mr. Rogers—6,006 PSUs and 18,021 RSUs; and Ms. Seymour—4,505 PSUs and 13,516 RSUs.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        31


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

How Our Compensation Committee Makes Decisions

 

HOW OUR COMPENSATION COMMITTEE MAKES DECISIONS

 

LOGO

 

 

OUR COMPENSATION PRINCIPLES FIRMWIDE PERFORMANCE INDIVIDUAL PERFORMANCE STAKEHOLDER FEEDBACK CRO INPUT AND RISK MANAGEMENT MARKET FOR TALENT REGULATORY CONSIDERATIONS INDEPENDENT COMPENSATION CONSULTANT

 

LOGO

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 & CULTURE
      DISCOURAGING IMPRUDENT 
RISK-TAKING
     

ATTRACTING &

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 and the recognition of individual performance should also be considered in the context of the competitive market for talent.

 

   

In addition to our Compensation Principles, our Compensation Committee is guided by our variable compensation frameworks, which more broadly govern the variable compensation process for employees who could expose the firm to material amounts of risk (such as our NEOs).

 

LOGO

FIRMWIDE PERFORMANCE

 

   

Consistent with our pay-for-performance philosophy, our Compensation Committee places substantial importance on the assessment of firmwide performance when determining NEO compensation.

 

   

The assessment of firmwide performance takes into account a number of factors. For 2019 compensation decisions, the Committee determined it was appropriate to focus on the strategic planning and investments made during 2019 to develop, articulate and begin execution of a new long-term growth strategy, which will provide the foundation for more durable revenues over time, and to implement a new operating approach for the firm.

 

   

In addition, during 2019 we developed a new Performance Assessment Framework to help provide greater definition to, and transparency regarding, the key factors considered by the Compensation Committee to assess certain aspects of the firm’s annual performance in connection with compensation decisions for our NEOs and Management Committee. The framework, which guided our Compensation Committee’s process for 2019, aligns performance metrics and goals across our most senior leaders, and helps to ensure that our compensation program for our NEOs and Management Committee continues to be appropriately aligned with our long-term strategy, stakeholder expectations and the safety and soundness of our firm.

 

    OVERVIEW OF PERFORMANCE ASSESSMENT FRAMEWORK
   
     FINANCIAL PERFORMANCE    HOW THE RESULTS ARE ACHIEVED / INVESTMENT IN THE FUTURE
       
          CLIENTS    RISK MANAGEMENT   

LEADERSHIP, CULTURE

& VALUES

     

LOGO

FIRMWIDE

  

  ROE

  ROTE

  Efficiency ratio

  BVPS growth

  Pre-tax earnings

  Net revenue

  EPS

  TSR

  

 Cross-divisional strategy/ collaboration

 Client satisfaction

 Broaden share of addressable market

  

  Reputation

  Conduct

  Compliance

  Standing with regulators

  Governance and controls

  Capital and liquidity

  

 Progress towards announced aspirational diversity goals

 Teamwork and collaboration

 Succession planning and next generation leadership development

 

32        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

How Our Compensation Committee Makes Decisions

 

   

The framework includes an assessment of financial metrics and non-financial factors on a firmwide basis. It also includes divisional metrics which underpin firmwide performance and serve to inform compensation decisions for the firm’s divisional leaders.

 

   

New for 2020. We will continue to evolve our Performance Assessment Framework over time to ensure that it continues to align with our long-term strategy and goals. For 2020, the Committee has adopted financial metrics that align with the goals announced at our recent Investor Day, as well as non-financial factors that will inform 2020 compensation decisions.

 

 

LOGO

INDIVIDUAL PERFORMANCE

 

 An assessment of each NEO’s individual performance and achievements is critical to our Compensation Committee’s decision-making process, including how each of our NEOs helped to contribute to firmwide performance. Each of our NEOs is evaluated under our 360° Review Process, which includes confidential input from employees, including those who are senior to (other than for our CEO), peers of and junior to the employee being reviewed. Our 360° Review Process assesses performance across a variety of factors, including risk management and firm reputation, control-side empowerment, judgment, compliance with firm policies, commercial contributions, culture contributions, diversity and inclusion, communication, leadership and people development, and client focus.

  

LOGO

360° REVIEW PROCESS

 

   

Our CEO: Under the direction of our Lead Director, our Governance Committee evaluated the performance of Mr. Solomon, including a summary of his evaluation under the 360° Review Process (see Corporate GovernanceBoard Oversight of our Firm—Key Areas of Board Oversight—CEO Performance). Our Compensation Committee considered this evaluation and also discussed Mr. Solomon’s performance as part of its executive session to determine his compensation.

 

   

Other NEOs: Mr. Solomon discussed with the Compensation Committee the performance of our COO and CFO, including a summary of their evaluations under the 360° Review Process. Similarly, Mr. Waldron discussed with the Committee the performance of our other NEOs, including a summary of their evaluations under the 360° Review Process. In this context, Mr. Solomon and Mr. Waldron submitted variable compensation recommendations to the Committee for our NEOs, but did not make recommendations about their own compensation.

 

 

LOGO

STAKEHOLDER FEEDBACK

 

   

2019 Say on Pay Results. Our 2019 Say on Pay vote received the support of approximately 91% of our shareholders. The Committee viewed this outcome as an indication of our shareholders’ positive reaction to our compensation program.

 

   

Stakeholder Engagement. Engagement has been and continues to be a priority for our Board. To this end, we engage extensively with our stakeholders each year and the feedback received continues to inform our Board and Compensation Committee actions. For example, in 2019 we (including, in certain cases, our Lead Director) met with shareholders representing more than 35% of Common Stock outstanding to discuss compensation-related matters and other areas of focus.

 

   

Board Responsiveness. Stakeholder feedback received over the last several years continues to inform our Board and Compensation Committee actions:

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        33


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

How Our Compensation Committee Makes Decisions

 

 

       
 2018        2019          
       
       STAKEHOLDER FEEDBACK     

COMPENSATION COMMITTEE ACTION

 

In response to stakeholder feedback, we enhanced the rigor of our PSU design by increasing:

 

  absolute ROE threshold for maximum payout from 14% to 16%,

 

  target for 100% payout under relative ROE goals from 50th percentile to 60th, and

 

  minimum absolute ROE threshold for payout from 4% to 5%.

    

 

LOGO

SUPPORT FOR NEW PSU DESIGN

  

 

LOGO   

 

 

Equity-based annual compensation for our Executive Leadership Team continues to be paid entirely in PSUs, subject to rigorous thresholds

 

    

 

LOGO

  

 

LOGO   

 

LOGO   

 

 

70% of our CEO’s and 60% of our COO’s and CFO’s 2019 annual variable compensation subject to ongoing performance metrics (compared to CEO U.S. Peer average of approx. 55%)

 

 

PSUs granted beyond Executive Leadership Team to our other NEOs and members of our Management Committee

 

 

    

 

LOGO

FOCUS ON HIGH LEVELS OF COMPENSATION COMMITTEE DISCRETION SUPPORT FOR HIGH PERCENTAGE OF PERFORMANCE-BASED PAY FOCUS ON HOW COMPENSATION PROGRAM TIES TO STRATEGY

 

LOGO

 

  

 

LOGO   

 

 

 

Implementation of new Performance Assessment Framework, to enhance transparency and alignment with forward strategy

 

    

 

LOGO

 

  

 

 

LOGO   

 

 

 

 

Enhanced CD&A disclosure, including regarding our new Performance Assessment Framework

 

    

 

 

LOGO

SUPPORT FOR STAKEHOLDER ENGAGEMENT AND RESPONSIVENESS SUPPORT FOR TRANSPARENT PROXY DISCLOSURE

  

 

LOGO   

 

LOGO   

 

 

Continued emphasis on extensive stakeholder engagement

 

Commitment to engagement by Lead Director and Compensation Committee Chair

 

 

 

LOGO

CRO INPUT & RISK MANAGEMENT

 

   

Effective risk management underpins everything that we do, and our compensation programs are 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 with the evaluation of our program’s design.

 

  »  

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

 

  »  

Our Compensation Committee and our CRO each believes 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. For example:

 

     

Compensation considered on Risk-Adjusted Metrics, such as net revenues and ROE (which are reflected in our Performance Assessment Framework)

 

Significant portion of pay in Equity-Based Awards aligns with long-term shareholder interests

 

Transfer Restrictions, Retention Requirements and Stock Ownership Guidelines work together to align compensation with long-term performance and discourage imprudent risk-taking

 

Robust Recapture provisions mitigate imprudent risk-taking, including that misconduct or improper risk analysis could result in clawback

 

34        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

How Our Compensation Committee Makes Decisions

 

 

LOGO

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 NEO compensation.

 

  »  

Wherever possible, our goal is 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.

 

   

To this end, the Committee regularly evaluates our NEO compensation program against benchmarking to ensure that our senior roles are properly valued, taking into account compensation program design and structure, as well as multi-year financial performance and quantum of NEO pay at our U.S. Peers and European Peers. In considering this benchmarking, the Committee also took into account that 2018 compensation levels for our Executive Leadership Team reflected that each had served in more than one role during that year.

 

   

The Committee performs this evaluation with information and assistance from our HCM division and FW Cook (as described below). Information provided by HCM about our peers is 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.

 

 

LOGO

REGULATORY CONSIDERATIONS

 

   

Our Compensation Committee also considers regulatory matters and the views of our regulators when determining NEO compensation. To this end, the Committee receives briefings on an ongoing basis on relevant regulatory developments. See also —CRO Input & Risk Management.

 

 

LOGO

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 our Board and its Committees and not to our firm.

 

   

For 2019, our Compensation Committee received the advice of Semler Brossy and FW Cook. Semler Brossy provided input on the development of our Performance Assessment Framework, as well as on changes to our PSU program eligibility and design. Semler Brossy did not recommend, and was not involved in determining, the amount of any NEO’s compensation. FW Cook, who was retained by the Committee in October 2019, participated in discussions regarding our CRO’s compensation-related risk assessment, provided input and advice on our Performance Assessment Framework and the structure and amount of our 2019 NEO compensation program, advised on other compensation matters and provided additional benchmarking information to the Committee.

 

   

Our Compensation Committee determined that each of Semler Brossy and FW Cook 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.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        35


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

Overview of Compensation Elements and Key Pay Practices

 

OVERVIEW OF COMPENSATION ELEMENTS AND KEY PAY PRACTICES

 

Our Compensation Committee believes the design of our executive compensation program is integral to further our Compensation Principles, including paying for performance and effective risk management.

 

   PAY ELEMENT    CHARACTERISTICS    PURPOSE    2019 COMPENSATION
   BASE SALARY    Annual fixed cash compensation    Provides our executives with a predictable level of income that is competitive with our peers    We made no changes to NEO annual base salary levels ($2.0 million for our CEO, $1.85 million for our COO and CFO and $1.5 million for our other NEOs), and our Compensation Committee believes that these salary levels are competitive in the market for talent
 

   ANNUAL

   VARIABLE

   COMPENSATION(a)

   Cash    Motivates and rewards achievement of company performance, strategic and operational objectives    In 2019, each of our NEOs received a portion of their annual variable compensation (no more than 40%) in the form of a cash bonus
 

 

  

Equity-Based

PSUs

RSUs

   Aligns our executives’ interests with those of our shareholders and motivates executives to achieve longer-term performance, strategic and operational objectives   

Each of our NEOs received at least 60% of his or her annual variable compensation in the form of equity-based compensation

  Executive Leadership Team: 100% PSUs

  Other NEOs: 25% PSUs (new); 75% RSUs

Our equity-based awards and underlying Shares at Risk are subject to transfer restrictions, retention requirements and robust recapture provisions

 

(a)

Our NEOs participate in the Goldman Sachs Partner Compensation Plan (PCP), the plan under which we determine variable compensation for all of our other PMDs.

 

LOGO

What We Do What We Don't Do Engage proactively with shareholders and other stakeholders Review and carefully consider stakeholder feedback in structuring and determining executive compensation Grant equity-based awards as a significant portion of our NEOs' annual variable compensation (for 2019 at least 60%) Align pay with firmwide performance, including through use of PSUs and RSUs Utilize Performance Assessment Framework to assess performance through financial and non-financial metrics Tie 100% of equity-based compensation granted to our Executive Leadership Team to ongoing performance metrics Exercise judgment responsive to the cyclical nature of our business, including consideration of appropriate risk-based and other metrics within the context of our Performance Assessment Framework Apply significant shareholding requirements through: Stock Ownership Guidelines for Executive Leadership Team Retention Requirements Shares at Risk Maintain robust clawback and forfeiture provisions that apply to variable compensation awards Provide for annual assessment by our CRO of our compensation program to ensure it does not encourage imprudent risk-taking Utilize independent compensation consultants No employment agreements providing for severance pay with our executive officers (including our NEOs) No golden parachutes No guaranteed bonus arrangements with our executive officers No tax gross-ups for our executive officers No repricing of underwater stock options No excessive perquisites No ongoing service-based pension benefit accruals for executive officers No hedging transactions or short sales of our common stock permitted for any executive officer

 

36        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Compensation

 

2019 COMPENSATION

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 after consideration of the factors set forth in —How our Compensation Committee Makes its Decisions.

 

 

LOGO

2019 COMPENSATION REFLECTS Development & execution of long-term growth strategy Building foundation for more durable revenues over time Implementation of new operating approach Driving enhanced discipline, accountability and transparency Consistent, solid net revenue performance Demonstrating continued strength of our franchise Strong individual performance Exemplary leadership and tone at the top; first full year in role for Executive Leadership Team Compensation incentivizes continued long-term, sustainable growth and achievement of financial targets without undue emphasis on shorter-term results

Long-Term Growth Strategy and New Operating Approach

 

   

Central to our Compensation Committee decisions for 2019 was the strategic vision and planning undertaken by our NEOs, and in particular our Executive Leadership Team, in the development and initial execution of the firm’s long-term growth strategy as articulated at our January 2020 Investor Day.

 

   

In particular, our Executive Leadership Team drove the development of the firm’s forward strategic plan, and committed to making the necessary investments to drive long-term, sustainable growth for our shareholders. Each of our NEOs also focused on the implementation of a new operating approach that delivers One Goldman Sachs to our clients, is underscored by a multi-year financial planning process, invests in new and existing businesses and enhances accountability and transparency.

 

   

In addition to its focus on 2019 firmwide performance, as described below, the Committee worked to ensure that the structure and amount of our NEO compensation appropriately incentivizes our NEOs to continue to build long-term, sustainable growth and to achieve our financial targets, without undue emphasis on shorter-term results.

 

  »  

For example, each of our NEOs receives at least 60% of his or her variable compensation in the form of equity-based awards that promote alignment with long-term shareholder interests.

 

  »  

Further, all of our Executive Leadership Team’s equity-based awards are in the form of PSUs subject to ongoing performance metrics and, for the first time, PSUs were granted to our other NEOs and Management Committee members, resulting in 25% of their equity-based awards being subject to ongoing performance metrics.

2019 Firmwide Performance

 

   

Our Compensation Committee also places key importance on the assessment of annual firmwide performance when determining NEO compensation. Performance is assessed in a holistic manner, and was guided by our new Performance Assessment Framework, without ascribing specific weight to any single factor or metric, as we continue to believe that a formulaic compensation program would not be in the best interests of our firm.

 

   

The Committee also considered various client, risk management, and leadership, culture and values-related strategies and goals set forth in the framework.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        37


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Compensation

 

 

   ASSESSMENT OF 2019 FIRMWIDE PERFORMANCE

 

              
         

FINANCIAL PERFORMANCE

  

ROE

 

10.0%

  

ROTE(a)

 

10.6%

  

Efficiency Ratio

 

68%

  

BVPS Growth

 

5.4% YoY

         
    

Pre-Tax Earnings

 

$10.6bn

  

Net Revenue

 

$36.5bn

  

EPS

 

$21.03

  

1-Year TSR

 

40.5%

   
 

 

  

  Consistent, solid net revenue performance, demonstrating revenue durability and continued strength of our franchise following strong year-over-year growth in 2018

 

  ROE of 10.0% was achieved in the context of our 2019 litigation expense and our investments for growth, which together reduced our 2019 ROE in excess of 200 basis points

 

  Strong one-year TSR

   

CLIENTS

  Cross-Divisional Strategy

  Client Satisfaction

  Broaden Market Share

  

  Successfully executing on initial One Goldman Sachs cross-divisional client coverage initiative, which resulted in positive client feedback and the development of a plan to more broadly implement One Goldman Sachs initiatives across firm

 

  Positive feedback on the biennial Client and Key Stakeholder survey and strong franchise rankings — including #1 in M&A and Equity Underwriting(b) and #2 Institutional Client Franchise(c) — as well as being a world-class active asset manager and a premier financial advisor

 

  Progress on four key opportunities to expand our addressable market and better serve clients (Transaction Banking, Third Party Alternatives, Digital Consumer Bank and Wealth Management)

   

RISK MANAGEMENT

  Reputation

  Conduct

  Compliance

  Standing with Regulators

  Governance & Controls

  Capital & Liquidity

  

  Ongoing focus on reputational risk assessment, including through the review of transactions with potentially heightened reputational risk by control-side regional vetting groups

 

  Made technological enhancements to manage risks, including through our insider threat program, consistent with our Enterprise Risk Framework and Risk Appetite Statement

 

  Continued to enhance our strong second- and third-line of defenses, including Risk, Legal, Compliance and Internal Audit, and elevate the role and stature of our Enterprise Risk Committee

 

  Continued engagement with our regulators

 

  Standardized CET1 ratio (13.3%) was unchanged, despite the return of $6.88 billion of capital to common shareholders during the year and an increase in our quarterly dividend from $0.85 per share to $1.25 per share beginning in the third quarter of 2019

 

  Maintained highly liquid balance sheet and robust liquidity metrics

   

LEADERSHIP, CULTURE & VALUES

  Diversity

  Teamwork

  Succession Planning

  Culture

  

  Took a broad approach to attracting and retaining diverse talent, including the announcement of, and progress towards, aspirational diversity goals, robust talent development programs and diversity retention initiatives

 

  Focus on development of next generation talent, including through the firm’s leadership pipeline review process

 

  Clear communication by senior management regarding Core Values and culture, including to further institutionalize cross-divisional teamwork and collaboration through One Goldman Sachs

 

(a)

For a reconciliation of this non-GAAP measure to the corresponding GAAP measure (ROE), please see Annex A: Calculation of Non-GAAP Measures.

 

(b)

Source: Dealogic

 

(c)

Source: Coalition institutional client analytics for FY2018. Institutional clients only. Analysis excludes captive, and non-core products.

 

38        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Compensation

 

2019 Individual Performance

 

   

The Committee assesses how each NEO’s individual performance (highlights of which are set forth below) contributed to the firm’s performance, including the development and execution of our long-term strategy and the metrics and factors described in our Performance Assessment Framework, as well as how each NEO exhibited exemplary leadership and set a tone at the top in the stewardship of our culture. During 2019, the key individual characteristics and performance achievements that our NEOs exhibited and were committed to included (as applicable):

 

 

LOGO

STRATEGIC VISION & DEVELOPMENT LEADERSHIP & CULTURE CARRIER OPERATIONAL APPROACH DIVERSITY & SUSTAINABILITY TALENT DEVELOPMENT

 

 

 

LOGO

 

 

 

David M. Solomon            

 

Chairman and CEO

  

 

KEY RESPONSIBILITIES AND PERFORMANCE ACHIEVEMENTS

 

  As Chairman and CEO, Mr. Solomon is responsible for leading our business operations and overseeing our firm, leading development and implementation of corporate policy and strategy and serving as primary liaison between our Board and our firm and as a primary public face of our firm.

  In 2019, Mr. Solomon:

»  Successfully executed on his priorities in his first full year as Chairman and CEO. This included a smooth leadership transition and empowering the other members of the Executive Leadership Team and senior leaders across the firm to execute on the firm’s strategic and operational goals.

 

»  Drove the development of the firm’s forward strategic plan as unveiled at the firm’s inaugural January 2020 Investor Day. To this end, he led our development of the firm’s three-year business plan and a clear long-term strategy that leverages our foundational advantages, enhances the firm’s long-term mindset and instills a culture of innovation as well as the breakdown of silos to enable a more client-centric and efficient approach.

 

»  Demonstrated a strong commitment to improved transparency and established more open and real-time information sharing broadly across internal and external stakeholders. Excelled as a skilled spokesman for the firm both internally and externally, utilizing technology and various forums to effectively convey the firm’s culture and strategy.

 

»  Drove the firm’s sustainability initiatives and remained committed to setting and advancing the firm’s diversity aspirations.

 

2019 Annual Compensation

 

LOGO

28% variable cash compensation 7% base salary 65% PSUs $27.5M Equity-based compensation represented 70% of 2019 annual variable compensation, paid 100% in PSUs subject to ongoing performance metrics.

     
     

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        39


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Compensation

 

  LOGO

 

 

 

       John E. Waldron

 

         President and COO

    

KEY RESPONSIBILITIES AND PERFORMANCE ACHIEVEMENTS

 

  As President and COO, Mr. Waldron’s responsibilities include managing our day-to-day business, executing on our firmwide strategy and other priorities and closely collaborating with our CFO (including on matters relating to risk management and firmwide operations), as well as engaging with, and serving as a liaison to, our clients.

  In 2019, Mr. Waldron:

 

»  Successfully concluded his first full year as President and COO, balancing oversight of revenue divisions and firm operations with extensive client coverage, demonstrating energy and discipline in the approach to his roles. Worked closely with our CEO and fostered a strong partnership with our CFO in the broad operation and administration of the firm.

 

»  Played a key leadership role in the development and execution of firm’s long-term growth strategy and enhanced operating approach. Responsible for institutionalizing our One Goldman Sachs initiative and ensuring that client centricity drives the firm’s approach to efforts such as organizational structure and talent deployment. To this end, has been highly engaged with divisional leadership to improve rigor, discipline, accountability and collaboration in order to advance the firm’s strategic goals.

 

»  Served as a skilled spokesman for the firm and a key liaison to our clients and other stakeholders.

 

»  Intently focused on harnessing the firm’s talent and appropriately incentivizing the firm’s people. Drove the assessment of the firm’s top performing leaders with a particular focus on diversity and development of the firm’s “next generation” talent.

 

2019 Annual Compensation

 

LOGO

37% variable cash compensation 8% base salary $24.5M 55% PSUs Equity-based compensation represented 60% of 2019 annual variable compensation, paid 100% in PSUs subject to ongoing performance metrics.

 

         

 

  LOGO

 

 

 

 Stephen M. Scherr

 

 CFO

    

KEY RESPONSIBILITIES AND PERFORMANCE ACHIEVEMENTS

 

  As CFO, Mr. Scherr manages the firm’s overall financial condition, as well as financial analysis and reporting. Further to these responsibilities, he also oversees various control functions, operations and technology and closely collaborates with our COO, including on issues relating to risk management and firmwide operations.

  In 2019, Mr. Scherr:

 

»  Successfully concluded his first full year as CFO. Effectively balanced the role’s technical responsibilities with the broad operation and administration of the firm in furtherance of the development and execution of the firm’s strategic and operational goals, in strong partnership with our COO and working closely with our CEO.

 

»  Led the development of the firm’s three-year business plan and the implementation of a newly centralized Financial Planning & Analysis function to support the firm’s strategy and operational goals.

 

»  Continued to drive accountability in the firm’s growth plans with appropriate focus on risk management, stature of control functions, and expense and capital management programs to help ensure the firm is well-positioned to deliver on its financial targets. Focused on the firm’s liquidity and risk profile, driving changes to support the firm’s strength while creating the basis for longer-term efficiencies.

 

»  Played instrumental role in upgrading the quality and transparency of the firm’s earnings calls and established strong credibility with our shareholders, press and public through skilled and effective presentations as well as revitalized engagement with the firm’s primary regulators.

 

»  Focused on control environment in connection with the widening of our consumer efforts.

2019 Annual Compensation

 

LOGO

37% variable cash compensation 8% base salary $22.5M 55% PSUs Equity-based compensation represented 60% of 2019 annual variable compensation, paid 100% in PSUs subject to ongoing performance metrics.

         
         

 

40        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Compensation

 

  LOGO

 

 

     John F.W. Rogers    

 

      EVP

    

KEY RESPONSIBILITIES AND PERFORMANCE ACHIEVEMENTS

 

  As EVP, Mr. Rogers is responsible for overseeing the firm’s executive functions, including corporate affairs, stakeholder relations (including clients, investors, the public, media and the government) and our corporate engagement efforts. He also serves as Chief of Staff of our firm and Secretary to the Board.

  In 2019, Mr. Rogers:

 

»  Served as a key advisor to our Executive Leadership Team, providing significant advice and leadership across a broad spectrum of topics, including strategy, corporate affairs, culture, reputational risk management, government affairs and public policy.

 

»  Provided leadership, guidance and insight with respect to the firm’s regulatory interactions and served as a nexus to various industry groups.

 

»  Spearheaded communications, marketing and branding efforts globally, including in connection with our One Goldman Sachs initiative and long-term growth strategy.

 

»  Continued to drive the firm’s culture and values, for example, providing key oversight in the development of our new Sustainable Finance Group and driving impact of the firm’s corporate engagement efforts related to 10,000 Small Businesses.

 

»  Demonstrated strong leadership in matters related to the firm’s Board of Directors, governance and stakeholder engagement.

 

 

2019 Annual Compensation

 

LOGO

35% variable cash compensation 13% base salary 13% PSUs 39% RSUs $11.5M Equity-based compensation represented 60% of 2019 annual variable compensation, paid 25% in PSUs (subject to ongoing performance metrics) and 75% in RSUs.

 

 

LOGO

 

 

Karen P. Seymour            

 

EVP and General Counsel

    

KEY RESPONSIBILITIES AND PERFORMANCE ACHIEVEMENTS

 

  As EVP and General Counsel, Ms. Seymour is head of the firm’s Legal Division and is responsible for overseeing the firm’s legal affairs worldwide.

  In 2019, Ms. Seymour:

 

»  Oversaw the firm’s strategy regarding litigation and enforcement issues and served as a key advisor to the firm across a variety of legal, reputational and other matters. Successfully resolved a number of important matters on behalf of the firm and continued to play a leading role in the negotiation of the firm’s most critical legal matters, including an active focus on the resolution of 1Malaysia Development Berhad (1MDB) matters.

 

»  Invested significant time and oversight with respect to the restructuring of the firm’s Legal Division, including to break down regional and operational silos, reduce expenses and increase communication within the division, in each case to ensure the Legal Division is well-positioned to advise on and assist with the firm’s growth plans and forward-strategy.

 

»  Implemented enhanced controls to manage and reduce professional fees and drive efficiencies; created a global Privacy Law Group to address increased privacy risk.

 

»  Played a key leadership role in many of the firm’s culture and diversity initiatives, including as a member of the Board of Advisors of Launch With GS, the firm’s $500 million commitment to invest in companies and investment managers with diverse leadership, and as a member of the firm’s Global Diversity Committee.

 

 

2019 Annual Compensation

 

LOGO

33% variable cash compensation 17% base salary 12.5% PSUs 37.5% RSUs $9M Equity-based compensation represented 60% of 2019 annual variable compensation, paid 25% in PSUs (subject to ongoing performance metrics) and 75% in RSUs.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        41


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

Equity-Based Variable Compensation Elements—A More Detailed Look

 

 

  EQUITY-BASED VARIABLE COMPENSATION ELEMENTS—A MORE DETAILED LOOK

 

 

We believe it is important to pay a significant portion of our variable compensation in equity-based awards.

For 2019 compensation, our Compensation Committee assessed the overall levels of equity-based as well as performance-based compensation for our NEOs; as a result, the Committee determined it was appropriate to pay 70% of Mr. Solomon’s and 60% of all other NEOs’ variable compensation in equity-based awards. This assessment also took into account that these levels were more consistent with those of peers.

Our Executive Leadership Team continued to receive their 2019 equity-based annual compensation entirely in PSUs. This year, in order to further tie compensation to ongoing performance metrics and further align goals across our most senior leaders, our Compensation Committee approved the granting of PSUs to our other NEOs as well as the other members of our Management Committee, who received 25% of their 2019 equity-based annual awards in PSUs, with the remainder continuing to be in RSUs.

Our equity-based variable compensation is subject to various robust risk-balancing features, as described more fully in —Other Compensation Policies and Practices. 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.

PSUs

 

  PSUs — Overview of Material Terms        
           
        

  PSUs provide recipient with annual variable compensation that has a metrics-based outcome; the ultimate value paid to the NEO is subject to firm performance both through stock price and metrics-based structure (ROE is used given it is a risk-based metric that is an important indicator of the firm’s operating performance and is viewed by many stakeholders as a key performance metric).

 

  PSUs will be paid at 0-150% of the initial award based on our average ROE over 2020–2022, using both absolute and relative metrics described in the below table.

 

 

     LOGO

 

  PSUs granted in January 2020 will be settled in 2023, 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 for our Executive Leadership Team. Similar to RSUs, the PSUs received by our other NEOs will settle in shares of Common Stock in 2023, substantially in the form of Shares at Risk.

 

3-YEAR AVERAGE ABSOLUTE ROE % EARNED <5% 0% 5% to <16% Based on relative ROE; see scale at right 16% 150% 3-YEAR AVERAGE RELATIVE ROE % EARNED(a) <25th percentile 25th percentile 60th percentile 75th percentile 25% 50% 100% 150% (a) % earned is scaled if performance is between specified thresholds

 

 

   

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

 

  »  

Our Compensation Committee continues to believe that this 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 asset and wealth management) and who have regulatory requirements similar to ours.

 

   

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 with respect to the PSUs’ relative metrics, annual ROE is as reported in the peer company’s publicly disclosed annual report, rounded to one decimal place.

 

   

The Committee may adjust the peer group in certain specified circumstances (e.g., a merger or other similar corporate transaction that results in a material substantial change in a peer company’s revenue mix or business activities).

 

42        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


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COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

Other Compensation Policies and Practices

 

   

If the Committee determines it is necessary or appropriate to maintain the intended economics of PSUs granted to our Executive Leadership Team, it may also make adjustments, including 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 changes in accounting methods, practices or policies, changes in capital structure, a material change in the firm’s or a peer company’s revenue mix or business activities or such other changed circumstances as the Committee may deem appropriate; any adjustments to the firm’s or a peer company’s ROE for purposes of the relative ROE calculation will be based on publicly disclosed financial information.

 

   

Each PSU includes a cumulative dividend equivalent right payable only if and when that PSU settles.

 

   

PSUs granted to our NEOs have no additional service-based vesting requirement; however, they are subject to various robust risk-balancing features, as described below.

RSUs

 

   

RSUs provide recipients with annual equity-based incentives, with value tied to firm performance through stock price.

 

   

Vested at grant for Mr. Rogers and Ms. Seymour; underlying shares are substantially delivered in the form of Shares at Risk (after applicable withholding) in three approximately equal installments on first, second and third anniversaries of grant.

 

   

Each RSU includes a dividend equivalent right.

 

 

OTHER COMPENSATION POLICIES AND PRACTICES

 

Robust Risk-Balancing Features

Compensation granted to our NEOs is subject to various longstanding risk-balancing features, including the use of Shares at Risk, retention requirements and, for our Executive Leadership Team, additional stock ownership guidelines.

 

   

Shares at Risk: Shares delivered pursuant to our equity-based awards generally deliver in the form of “Shares at Risk.” Shares at Risk are shares (after applicable tax withholding) that are subject to five-year transfer restrictions calculated based on the grant date (for 2019 Year-End Equity-Based awards, Shares at Risk will be subject to transfer restrictions through January 2025). 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 —Executive Compensation—Potential Payments Upon Termination or Change in Control for more detail).

 

   

Retention Requirements: Pursuant to our Policy on Retention Requirements and Stock Ownership Guidelines, each of our NEOs is subject to retention requirements 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 granted (net of payment of any withholding taxes) as compensation (After-Tax Shares) since becoming CEO.

 

  »  

Similarly, each of our COO and CFO is required, for so long as he holds such position, to retain at least 50% of After-Tax Shares granted as compensation since being appointed to such position.

 

  »  

Our other NEOs are required, for so long as they serve on the firm’s Management Committee, to retain at least 25% of After-Tax Shares granted as compensation since being appointed to the Management Committee.

 

   

Stock Ownership Guidelines: In addition, our Executive Leadership Team is subject to additional stock ownership guidelines that supplement the retention requirements. These guidelines 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 of our COO and CFO 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 such a position at the firm.

 

  »  

Transition rules apply in the event that an individual becomes newly appointed to a position subject to these guidelines.

 

   

Each member of our Executive Leadership Team met these stock ownership guidelines in 2019.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        43


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

Other Compensation Policies and Practices

 

   

Recapture Provisions: We have a longstanding practice of including robust recapture provisions in our variable compensation awards. To this end, we maintain several conduct-related recapture rights, as set forth below, which in many cases include both forfeiture and repayment rights (collectively, “Recapture”):

 

   
   

 

CAUSE

 

 

 

FAILURE TO CONSIDER RISK

 

   

LOGO

 

Each employee who receives equity-based awards as part of his or her year-end compensation (since IPO)

 

Each employee who receives equity-based awards as part of his or her year-end compensation (since 2009 year-end)

LOGO

 

If such employee engages in conduct constituting “cause,” including:

  Is convicted in a criminal proceeding on certain misdemeanor charges, on a felony charge or an equivalent charge;

  Engages in employment disqualification conduct under applicable law;

  Willfully fails to perform his or her duties to the firm;

  Violates any securities or commodities laws, rules or regulations of any relevant exchange or association of which the firm is a member;

  Violates any of our policies concerning hedging, pledging or confidential or proprietary information, or materially violates any other of our policies;

  Impairs, impugns, denigrates, disparages or negatively reflects upon our name, reputation or business interests; or

  Engages in conduct detrimental to the firm

 

If, during the time period specified in the award agreement, such employee participated (or otherwise oversaw or was responsible for, depending on the circumstances, another individual’s participation) in the structuring or marketing of any product or service, or participated on behalf of the firm or any of its clients in the purchase or sale of any security or other property, in any case without appropriate consideration of the risk to the firm or the broader financial system as a whole (for example, where such employee has improperly analyzed such risk or where they failed sufficiently to raise concerns about such risk) and, as a result of such action or omission, the Compensation Committee determines there has been, or reasonably could be expected to be, a material adverse impact on the firm, the employee’s business unit or the broader financial system.

   

LOGO

 

All outstanding PSUs, RSUs, Restricted Stock and Shares at Risk at the time “cause” occurs

 

All equity-based awards (e.g., PSUs and RSUs (and underlying Shares at Risk) and Restricted Stock) covered by the specified time period (e.g., the year for which the award was granted)

WHO APPLICATION WHAT

 

   

Pursuant to these Recapture provisions, if after delivery, payment or release of transfer restrictions we determine that a forfeiture event had previously occurred, we can require repayment to us of the award (including amounts withheld to pay withholding taxes) and any other amounts paid or delivered in respect thereof.

 

   

While, as disclosed last year, 2018 year-end equity-based awards provide our Board with flexibility to reduce the size of awards granted to our 2018 NEOs before payment and/or cause a forfeiture of the underlying delivered Shares at Risk if it is later determined that the results of the 1MDB investigation would have impacted 2018 year-end compensation for any such NEO, our Compensation Committee determined it was not necessary to include this provision in the 2019 year-end equity-based awards.

 

   

Our Compensation Committee adopted a comprehensive, standalone clawback policy in January 2015 that applies to each member of our Executive Leadership Team and generally permits recovery of awards (including equity-based awards and underlying Shares at Risk).

 

  »  

Among other things, the Clawback Policy expands our Recapture rights if the events covered by The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) occur, applying such provision to all variable compensation (whether cash- or equity-based) paid to any member of our Executive Leadership Team, even though the Sarbanes-Oxley provision on which it is based requires that such a clawback apply only to our CEO and CFO.

 

   

In addition, our 2019 year-end PSUs and, as applicable, RSUs (and, in certain cases, underlying Shares at Risk) granted to our NEOs also provide for Recapture if:

 

  »  

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);

 

44        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

Other Compensation Policies and Practices

 

  »  

The NEO associates with any business that constitutes a Covered Enterprise (as defined in —Executive Compensation—Potential Payments Upon Termination or Change in Control);

 

  »  

The NEO solicits our clients or prospective clients to transact business with a Covered Enterprise, or to refrain from doing business with us or interferes with any of our client relationships;

 

  »  

The NEO or an entity with which he or she is associated solicits or hires certain employees of the firm; or

 

  »  

The NEO fails to perform obligations under any agreement with us.

Hedging Policy; Pledging of Common Stock

Our executive officers (including our NEOs) and non-employee directors are prohibited from hedging any shares of our Common Stock, even shares they can freely sell, for so long as they remain executive officers or non-employee directors, as applicable. In addition, our NEOs, non-employee directors and all other employees are prohibited from hedging or pledging their equity-based awards. Our employees, other than our executive officers, may hedge only shares of our 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.” The restrictions described above also generally apply to such individual’s immediate family, household members and dependents. In addition, none of our executive officers or non-employee directors has any shares of Common Stock subject to a pledge.

Qualified Retirement Benefits

During 2019, each NEO participated in The Goldman Sachs 401(k) Plan (401(k) Plan), which is our U.S. broad-based tax-qualified retirement plan. In 2019 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 $11,200. For 2019, these individuals each received a matching contribution of $11,200.

Perquisites and Other Benefits

Our NEOs received in 2019 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’ 2019 variable compensation.

During 2019, we made available to each of our Executive Leadership Team a car and driver and, in some cases, other services for security and/or business purposes. For a portion of the year, car and driver services were contracted through a third party for Messrs. Waldron and Scherr. 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 NEOs participate in our executive medical and dental program and receive executive life insurance while they remain PMDs. Our NEOs also receive long-term disability insurance coverage. Our NEOs (and their covered dependents) are also eligible for a retiree healthcare 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—2019 Summary Compensation Table.

Section 162(m)

Section 162(m) of the Internal Revenue Code limits the tax deductibility of executive compensation paid to each of our “covered employees” to $1 million. In setting executive compensation, our Compensation Committee considers the factors identified in more detail in —How Our Compensation Committee Makes Its Decisions and does not take this limit on deductibility into account.

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        45


Table of Contents

COMPENSATION MATTERS—COMPENSATION DISCUSSION AND ANALYSIS

 

GS Gives

 

 

 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 $140 million for this year’s GS Gives program.

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 improves the lives of people in communities around the world. 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 donations and has no obligation to follow recommendations made to us by our PMDs.

In 2019, GS Gives accepted the recommendations of over 570 current and retired PMDs and granted over $142 million to over 2,500 not-for-profit organizations around the world. GS Gives made grants in support of a broad range of large-scale initiatives, including the fourth-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, with 2019’s winning teams addressing college financial aid literacy, feminine hygiene for impoverished communities and solar energy in last mile communities; a newly launched initiative in the U.K. to support mental health on university campuses; and education for impoverished children in Japan. Amounts donated in 2019 by GS Gives based on the following individuals’ recommendations were: Mr. Solomon—$3.3 million; Mr. Waldron—$1.3 million; Mr. Scherr—$1.0 million; Mr. Rogers—$0.5 million; and Ms. Seymour—$0.3 million.

 

46        Goldman Sachs  |  Proxy Statement for the 2020 Annual Meeting of Shareholders


Table of Contents

COMPENSATION MATTERS—EXECUTIVE COMPENSATION

 

 

Executive Compensation

The 2019 Summary Compensation Table below sets forth compensation information relating to 2019, 2018 and 2017. In accordance with SEC rules, compensation information for each NEO is only reported beginning with the year that such executive became an NEO. For a discussion of 2019 NEO compensation, please read —Compensation Discussion and Analysis above.

Pursuant to SEC rules, the 2019 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. As a result, annual equity-based awards and cash variable compensation are disclosed in each row of the table as follows:

2019

 

 

“Bonus” is cash variable compensation for 2019

 

 

“Stock Awards” are PSUs and RSUs awarded for 2018 (referred to as 2018 Year-End PSUs and 2018 Year-End RSUs)

2018

 

 

“Bonus” is cash variable compensation for 2018

 

 

“Stock Awards” are PSUs and shares of restricted stock (Restricted Stock) awarded for 2017 (referred to as 2017 Year-End PSUs and 2017 Year-End Restricted Stock)

2017

 

 

“Bonus” is cash variable compensation for 2017

 

 

“Stock Awards” are RSUs awarded for 2016 (referred to as 2016 Year-End RSUs)

 

Proxy Statement for the 2020 Annual Meeting of Shareholders  |  Goldman Sachs        47


Table of Contents

COMPENSATION MATTERS—EXECUTIVE COMPENSATION

 

2019 Summary Compensation Table

 

2019 SUMMARY COMPENSATION TABLE

 

 

NAME AND

PRINCIPAL POSITION

 

  

 

YEAR

 

    

 

SALARY ($)

 

    

 

BONUS ($)

 

    

 

STOCK
AWARDS(a)
($)

 

    

 

CHANGE IN
PENSION
VALUE(b) ($)

 

    

 

ALL OTHER
COMPENSATION(c)
($)

 

    

 

TOTAL ($)

 

 
               

 

David M. Solomon

Chairman and CEO

 

 

  

 

 

 

 

2019

 

 

 

 

  

 

 

 

 

2,000,000

 

 

 

 

  

 

 

 

 

7,650,000

 

 

 

 

  

 

 

 

 

14,724,012

 

 

 

 

  

 

 

 

 

296

 

 

 

 

  

 

 

 

 

283,429

 

 

 

 

  

 

 

 

 

24,657,737

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

  

 

 

 

 

1,887,500

 

 

 

 

  

 

 

 

 

5,700,375

 

 

 

 

  

 

 

 

 

12,775,034

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

299,926

 

 

 

 

  

 

 

 

 

20,662,835

 

 

 

 

  

 

 

 

 

2017

 

 

 

 

  

 

 

 

 

1,850,000

 

 

 

 

  

 

 

 

 

5,745,000

 

 

 

 

  

 

 

 

 

8,547,708

 

 

 

 

  

 

 

 

 

196

 

 

 

 

  

 

 

 

 

233,207

 

 

 

 

  

 

 

 

 

16,376,111

 

 

 

 

               

 

John E. Waldron

President and COO

 

  

 

 

 

 

2019

 

 

 

 

  

 

 

 

 

1,850,000

 

 

 

 

  

 

 

 

 

9,060,000

 

 

 

 

  

 

 

 

 

11,082,050

 

 

 

 

  

 

 

 

 

1,840

 

 

 

 

  

 

 

 

 

265,912

 

 

 

 

  

 

 

 

 

22,259,802

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

  

 

 

 

 

1,587,500

 

 

 

 

  

 

 

 

 

6,812,625