Ross Kerber and Saeed Azhar
(Reuters) – Goldman Sachs should separate the CEO and chairman positions currently held by David Solomon, chief trusted adviser to Institutional Shareholder Services (ISS), recommended on Wednesday.
“Shareholders would benefit from more independent oversight,” the ISS said in a report sent by a bank representative ahead of the bank’s annual shareholders meeting on April 24.
“Solomon’s foray into the consumer space was met with missteps and huge losses that appear to have developed into further human capital problems,” it added.
The Wall Street giant is cutting back its consumer business, which Solomon championed, after its operations lost billions of dollars.
Several senior executives have also left Goldman, including Stephanie Cohen, former head of consumer and financial technology, Jim Esposito, co-head of global banking and markets this year, and Julian Salisbury, chief executive of wealth management, last July. .
ISS also recommended voting for all bank director candidates and said “precautionary support” was warranted on executive pay, although the bank’s compensation program relied too heavily on discretion.
The independence of bank management has become a hot-button issue since the 2008 global financial crisis. Solomon has served as CEO since 2018 and became chairman the following year.
The shareholder resolution calling for the separation of the roles of chairman and CEO was filed by the conservative National Law and Policy Center. Last year, he introduced a similar measure that received support with just 16% of votes cast.
Goldman’s size and complexity make it difficult for one person to run the company and its board of directors, according to ISS.
A Goldman spokesman cited the bank’s recommendation to vote against the independent chairman’s proposal as outlined in its proxy statement.
The bank has appointed David Vignar, who served as CFO from 1999 to 2013, as its next independent lead director. He will succeed Adebayo Ogunlesi, who will retire at the annual meeting.
While the lead director’s responsibilities are generally considered secure and Vignar is considered independent by ISS standards, “some may question the decision to appoint a former Goldman executive to the position at this time,” it said.
Vinyar has served on the Goldman board of directors since January 2013.