Goldman's 1MDB claw back plan - What you should know

GOLDMAN SACHS’ ROLE IN 1MDB SCANDAL

• Goldman Sachs has been investigated by regulators in at least 14 countries for its role in raising $6.5 billion in three bond sales between 2012 and 2013 for the 1Malaysia Development Berhad (1MDB) fund.
• Goldman bankers reaped about $600 million in fees to facilitate bond deals
• In 2018, the bank pleaded guilty to violating US foreign bribery rules in October over its role in the 1MDB scandal.
• Goldman maintained that just a pair of rogue employees were responsible for the bank’s part in the scandal.
• In July 2020, Goldman Sachs agreed in a deal that includes a $2.5 billion cash payout to the Malaysian government and a guarantee by the bank to return at least $1.4 billion from 1MDB assets seized around the world.

THE CLAW BACK PLAN

In October, Goldman pledged to reclaim $174 million from current and former top executives involved in the 1MDB scandal to recoup some money for the bank and to hold executives accountable.

Of the total, Goldman is seeking to claw back :

• $76 million from the three former employees most implicated in the scandal:

1. Timothy Leissner
2. Roger Ng
3. Andrea Vella

• Five former senior executives including Former CEO Llyoyd Blankfein have been asked to return $67 million in long-term compensation awarded back in 2011.

• Current CEO, David Solomon including his chief operating officer, chief financial officer and international division head will have their 2020 pay cut by $31 million.

However, the bank has failed to persuade former president Gary Cohn to return over $10 million he received in pay. According to Bloomberg, Cohn is having “very constructive conversations with Goldman Sachs” on the matter but there is little that the bank can do if Cohn simply refuses or offers up a discounted sum.

Cohn reportedly cashed out all his long-term Goldman bonuses when he was appointed as an economic advisor to the Donald Trump administration.