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Goldman's David Solomon defeats vote on CEO-chair split even as support for it increases

David Solomon defeated a shareholder proposal seeking to separate his roles as CEO and chairman of Goldman Sachs (GS), but the measure received double the support it did in 2023.

The preliminary tally released by the Wall Street giant at its annual meeting Wednesday showed 33% of shareholders in favor of the split, up from 16% last year.

"We are pleased that voting in support doubled from last year," said Luke Perlot of the National Legal and Policy Center, which sponsored the shareholder proposal. "We are disappointed that these clear examples of excesses did not convince a majority to support our proposal."

Goldman Sachs' Chairman and CEO David Solomon attends a session at the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 21, 2020. REUTERS/Denis Balibouse
Goldman Sachs chairman and CEO David Solomon. REUTERS/Denis Balibouse (REUTERS / Reuters)

Perlot argued that the dual role held by Solomon had shielded him from the accountability of past missteps, including the company's costly push into consumer banking.

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Shareholders at Bank of America (BAC) also rejected a similar proposal Wednesday that would have separated the CEO and chairman roles held by Brian Moynihan. There were 31% in favor of it, as compared with 26% last year.

Both banks have argued they need the flexibility to determine the best leadership structure for their firms.

Solomon and Moynihan are among several Wall Street bosses to be tested by such proposals this year.

In May, JPMorgan Chase’s (JPM) Jamie Dimon and BlackRock’s (BLK) Larry Fink will also face such tallies. And Citigroup (C) shareholders will vote next week to formalize a CEO-chair split in its bylaws, even though the company has had an independent board chair since 2009.

Other big banks, including Wells Fargo (WFC), Morgan Stanley (MS), already have separate CEO and chair positions.

The pressure to split the CEO and chairman roles in the US ramped up in the aftermath of the 2008 financial crisis. Between 2010 and 2023, 76 companies within the S&P 500 did so, according to ISS-Corporate.

By the end of 2023, nearly 60% of S&P 500 companies had those roles split.

The Goldman vote was of particular interest to Wall Street observers because Solomon is emerging from his most challenging year ever as boss.

Dealmaking slowed across Wall Street and he grappled with a costly exit from consumer banking as well as a series of high-profile departures from the firm.

The firm’s profit declined by 24% and Solomon’s annual compensation still rose by the same percentage — to $31 million.

ISS and Glass Lewis both advised shareholders to cast votes Wednesday in favor of separating Solomon’s roles.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.

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