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Morning Coffee: The $31m Goldman Sachs banker who might consider himself underpaid. Female banker fired for relationship with colleague

Is David Solomon, CEO of Goldman Sachs, paid fairly? It's a question worth asking because when Solomon's pay sparkled 24% higher to $31m following a bonus round in which other Goldman people were asked to take one for the firm, there was incredulity. Since then, things have become a bit more complicated. 

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On one hand, Bloomberg reports that Glass Lewis & Co, a proxy advisory firm, thinks Solomon has been treated too lavishly. While Solomon's pay rise suggests an A* performance, Glass Lewis & Co judge that he actually achieved an "F" grade and should not have been empowered to buy more holiday homes in the Bahamas. Another proxy firm, Institutional Shareholder Services (ISS), thinks so too. 

On the other hand, Bloomberg also notes that "Solomon and his deputies" have developed a habit of looking about and discerning that other people are paid a lot more than them elsewhere. Those people are not just the CEO of Reddit, but people who used to work for Goldman Sachs. They are people who've gone to hedge funds and private equity. 

The high earners Solomon et al are peering at include Harvey Schwartz, the Carlyle CEO with an interesting backstory and challenging childhood. Schwartz was in the running to become Goldman CEO with Solomon. When Solomon beat him to that role, Schwartz left for Carlyle where he's been awarded pay packages totaling $217m since 2023. In the next five-years, Schwartz's pay could top $500m if he manages to double the value of Carlyle stock. Solomon, by comparison, has received the merest $189m for six years of Goldman Sachs toil.

It's easy to see why Solomon might feel miffed and that his 24% pay rise is deserved. And yet, Goldman Sachs' profits plummeted last year while Carlyle scattered money at Schwartz for boosting earnings, cutting costs and "implementing organizational design initiatives", among other things. 

For the moment, the best advice to Solomon might be to avoid the Hamptons or the Baker's Bay Golf and Ocean Club and to frequent establishments where people think $189m is a huge amount of money. Riches are relative. He might want to avoid Schwartz. He might also want to avoid former Goldman Sachs CEO Lloyd Blankfein, who earned $68m in a single year (2007) and is a billionaire.  

Separately, it's not just male bankers in positions of power who have affairs with colleagues and lose their jobs as a result. The Times reports that Nadine Ahn, CFO of Royal Bank of Canada, has been fired for an affair of her own. Ahn, who is in her mid-40s, is thought to have given her colleague special treatment.

Meanwhile...

US banks think it's too hard to dismiss expensive traders in Paris. “Our critical mass in Paris has increased, but we need to be able to be reactive too.” (Financial Times) 

No one wants to work for accounting firms and they might have to change their ownership structures as a result. “Attracting talent is a real issue for everybody in this category. Other kinds of compensation models or equity models might become necessary in order to attract talent. The need to invest in technologies is only going to increase and that takes money.” (WSJ) 

Unicredit hired HSBC's head of media, Andrea Coda, as its head of M&A, based in Milan. (Bloomberg) 

The new chairman of JPMorgan's onshore China securities business is Lu Fang, a former official at China’s securities regulator who was hired in 2022. (Bloomberg) 

BNP Paribas is giving up office space and cutting costs in Singapore. (Bloomberg) 

62-year-old former rugby lawyer Paul Weightman founded Corinthia Global Management and poached more than 20 senior executives from asset manager Barings last month, provoking a preliminary injunction preventing him soliciting Barings’ clients, hiring Barings’ employees or making use of Barings’ confidential information. “The US guys were employed at will,” he says. “I thought it was better to talk to people directly than through headhunters. I’m a front door sorta guy. I think it was effective and I’d do it again.” (Financial Times) 

Rokos Capital Management is up 12.5% through to March. (Bloomberg) 

A hedge fund headhunter says people working in hedge funds are interested in more than the money. “The question becomes: Are you really set up for success, how do you develop, and what are the resources the firm has to get you there?” (Bloomberg) 

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AUTHORSarah Butcher Global Editor

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