THE 1MDB scandal is likely to impact on the deferred bonuses of Goldman Sachs senior executives, report Bloomberg and The Wall Street Journal.

Goldman Sachs is the investment bank at the heart of the scandal after helping the debt-ridden 1Malaysia Development Bhd raise US$6.5 billion via three bond tranches in 2012 and 2013.

Its chief executive officer then was Lloyd Blankfein, who earned US$20.5 million (RM84 million) in 2018 while his successor, David Solomon, enjoyed a US$23 million award package last year.

Both now face the prospect of having their packages slashed under a “clawback” clause following the numerous government probes into 1MDB, the reports said.

Goldman Sachs’ board of directors will also withhold deferred bonuses to two former vice-chairmen –Michael Sherwood and J. Michael Evans.

The bank increased the funds it set aside for litigation and regulatory proceedings to US$516 million from US$9 million in the year-ago period, it disclosed during last month’s briefing on its fourth-quarter profits.

Solomon took over as CEO on October 1 last year in the midst of the US Department of Justice’s probe into 1MDB.

He has also apologised for the role played by former employees Tim Leissner and Roger Ng, who “blatantly broke the law” in their dealings with 1MDB.

Goldman Sachs said on Friday it will defer payout of long-term cash awards granted in January 2011 to Blankfein, Sherwood and Evans. Sherwood was co-head of the firm’s international unit and Evans oversaw the 1MDB bond sales.

The size of the payout, originally set at US$7 million, is linked to the bank’s performance over eight years.

Blankfein is now senior chairman of the bank. – February 2, 2019.