Goldman Sachs’ top executives are expected to receive more than $500 million in special stock bonuses as a five-year reward program reaches its finish this month. The estimated payout reflects the bank’s strong stock performance, but the final amounts have not yet been determined.
About 20 executives are expected to benefit, with Chief Executive David Solomon in line for more than $100 million, according to Bloomberg reporting cited by Reuters. Other recipients include President John Waldron and senior business leaders Ashok Varadhan, Dan Dees and Marc Nachmann.
These awards are separate from the executives’ regular salaries and annual bonuses. They are paid in company shares, so their dollar value can change with Goldman’s stock price. The Financial Times also reported that the overall awards would exceed $500 million at current prices, citing a person familiar with the matter.
Goldman created the program for Solomon and Waldron in October 2021 and expanded it to other senior executives in January 2022. The bank said its goals were to keep experienced leaders, encourage teamwork and reward long-term gains for shareholders.
The plan measures two things equally: Goldman’s own stock return, including dividends, and its performance against six competing banks—JPMorgan Chase, Morgan Stanley, Bank of America, Citigroup, Wells Fargo and BNY Mellon.
Solomon originally received 73,264 performance-based stock units, while Waldron received 48,843. Goldman listed their award amounts as $30 million and $20 million. The lower figures of $17 million and $11.4 million were accounting estimates that reflected performance conditions and restrictions.
That distinction matters. The two executives’ original accounting values cannot be directly compared with today’s reported $500 million-plus total, which covers a much larger group.
The payout can grow in two ways: executives can earn more shares by reaching stronger performance targets, and those shares can become more valuable as Goldman’s stock rises. The maximum award is 150% of the original target number of shares.
The program also illustrates how different executive compensation can be from an ordinary paycheck. A stock award is a promise with conditions attached. Its initial accounting value, the number of shares eventually earned and the value of those shares when delivered are different measurements.
The special awards come on top of substantial annual compensation. Solomon’s pay for 2024 was $39 million, up from $31 million in 2023—an increase of about 26%.
In January 2025, Goldman also granted Solomon and Waldron separate retention awards valued at $80 million each. Those awards have a five-year vesting period, meaning the executives generally must remain with the firm long enough to earn them. They are distinct from the program now reaching its conclusion.
For shareholders, executive stock awards create a trade-off. Linking compensation to investment returns gives managers a financial reason to increase the company’s value. But shares used for compensation still have an economic cost.
If an award increases the number of shares outstanding, existing investors own a slightly smaller percentage of the business. Share repurchases can offset that effect, but buying back stock requires company money. The reported bonus total alone does not establish how much dilution shareholders will experience.
Investors who own Goldman directly, or through funds that hold its shares, also participate in its stock gains. Their individual returns depend on when they invested and how much Goldman their portfolios contain.
Goldman is expected to report third-quarter earnings next week. Those results will provide the next look at the business performance behind the share-price gains, while the final award amounts remain to be settled later this month.
JBizNews Desk | Wall Street
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