Goldman’s Ceo Is Paying Himself Like A Private-equity Chief

David Solomon is getting a bigger slice of Goldman Sachs Group Inc.’s private-equity profits.

The Goldman Sachs chief executive and a tight circle of lieutenants are taking a cut of profits from the firm’s private investment funds, according to people familiar with the plans. The perk could be worth hundreds of millions of dollars over the next several years to those executives, the people said, multiples of their annual pay depending on how those funds do.

The perk risks angering both shareholders and the Goldman fund managers out of whose pockets the money will come.

Goldman executives and partners can only earn the carried interest if they also invest their own money in the funds, a bank spokeswoman said. With “reasonable fund returns,” she said, the executives couldn’t earn multiples of their annual pay.

The bank’s board reviews the co-investment program each year, she said.

Wall Street executives are enormously wealthy by almost any measure. Mr. Solomon made $35 million last year, in line with the CEOs of other big U.S. banks. But when new fortunes are being minted in technology, cryptocurrencies and NFTs, their paydays are starting to pale in comparison.

They are being outshone even in their own backyard by private-equity firms and hedge funds, whose executives have ridden hot markets over the past few years to huge pay packages. KKR’s co-CEOs were paid more than $500 million last year. Mr. Solomon’s 2021 pay was half of what his predecessor, Lloyd Blankfein, made at his pre-2008 peak.

Unique among banks, Goldman is a big player in private investing. The firm has $426 billion of its own money and that of clients invested in corporate buyouts, loans, real estate and stakes in other investment funds. It is in the middle of another big fundraising push.

In the past, the profits from those investments—known in the industry as carried interest—were split…

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