Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On
The Shareholder Value Creation Award is a stock-based award that is subject to both performance and time-based vesting conditions and is designed to directly tie longer-term pay outcomes to shareholder value creation in a balanced manner that does not encourage imprudent risk taking. In granting the Shareholder Value Creation Award, the Board intended to address three key objectives: (1) ensure leadership continuity over the next 5+ years in the next phase of Goldman Sachs' growth strategy; (2) align compensation with rigorous performance thresholds that drive long-term shareholder value creation; and (3) enhance retention in response to the rapidly increasing war for talent in the current environment. The Shareholder Value Creation Award is not part of Messrs. Solomon's or Waldron's regular annual compensation and will not be awarded on a regularly recurring basis.
The Shareholder Value Creation Award's performance-based vesting is based 50% on absolute total shareholder return (TSR) goals and 50% on relative TSR goals, all of which have been pre-established by the Board. The overall payout percentage of the Shareholder Value Creation Award will equal the sum of the percentage of Target Earned under each of the Cumulative Absolute TSR Goals and Relative TSR Goals. Amounts earned are determined by linear interpolation if results are between the TSR goals (both absolute and relative). Vesting will be determined over a five-year performance period beginning on the grant date, based on the following goals:
Cumulative Absolute TSR Goals* % of Target Earned Relative TSR Goals % of Target Earned ³75% 75% ³80th Percentile 75% 60% 50% 65th Percentile 50% 47% 25% 40th Percentile 25% <47% 0% <40th Percentile 0%
* Resulting stock price plus dividends would be
The number of initial PSUs granted to each of Messrs. Solomon and Waldron was
determined based on a stock price of
Vesting is also subject to continuous service with Goldman Sachs until the end of the five-year performance period, with limited exceptions provided in the applicable award agreement and the Goldman Sachs Amended and Restated Stock Incentive Plan (2021) (the SIP), such as death and disability. Any amounts earned under the Shareholder Value Creation Award are settled in shares of common stock of Goldman Sachs that will deliver at the end of the performance period, on or about the fifth anniversary of the date of grant of the award. These shares will be subject to transfer restrictions for one additional year after delivery, and also will be subject to forfeiture and clawback provisions, including recapture for events constituting "Cause," failing to perform obligations under any agreement with Goldman Sachs, and participating in (or otherwise overseeing or being responsible for, depending on the circumstances, another individual's participation) materially improper risk analysis or failing sufficiently to raise concerns about risks during the performance period.
This summary of the Shareholder Value Creation Award is qualified in its entirety by reference to the applicable award agreement (a form of which is attached as an exhibit to the Registrant's most recent Annual Report on Form 10-K) and to the SIP (which is attached as an annex to the proxy statement for Registrant's most recent Annual Meeting of Shareholders).
(1) Grant date fair value reflects a discount related to the probability of
achieving the award's goals and transfer restrictions on the common stock
underlying these PSUs.
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