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Top Goldman executives face pay cuts over Malaysia scandal

Investment bank eyes clawbacks of 2018 remuneration for current and former CEOs

David Solomon, CEO of Goldman Sachs, may see his $23 million pay for 2018 reduced.
David Solomon, CEO of Goldman Sachs, may see his $23 million pay for 2018 reduced.   © Reuters

NEW YORK -- Goldman Sachs Group could reduce executive compensation for 2018 over the roles of former bankers there in the corruption scandal that engulfed a Malaysian state fund.

Goldman said in a Friday securities filing that its board approved a forfeiture provision allowing the reduction of equity-based rewards granted to senior executives as of Dec. 31 if an investigation into the 1Malaysia Development Berhad fund, or 1MDB, results in massive fines or penalties that affect company earnings. 

The pay cuts would hit current CEO David Solomon and predecessor Lloyd Blankfein, who left Goldman in December, sources say.

Solomon received $23 million in total annual compensation for 2018, while Blankfein was awarded $20.5 million, according to the filing. These amounts could be reduced, depending on the outcome of the investigation into 1MDB.

In November, the U.S. Department of Justice announced the indictment of an ex-Goldman banker and a guilty plea by another for what it said was conspiring to launder money misappropriated from 1MDB.

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