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Goldman Sachs buys two corporate jets

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Via Financial Times

Goldman Sachs is buying two corporate jets for the use of chief executive David Solomon and other top bankers, after officials concluded that the aircraft would help meet the group’s goal of saving $1.3bn over the next three years.

The Gulfstream planes, which cost tens of millions of dollars apiece, were ordered in November.

“We have long made private aircraft available to senior executives who travel extensively to see clients, and that travel was arranged through a fractional ownership arrangement with NetJets,” Goldman said. “A detailed analysis demonstrated conclusively that it would be more cost effective to own the aircraft directly.”

Since accepting the top job in 2018, Mr Solomon has sought to turn round a bank that has endured years of subpar returns.

Under his leadership, Goldman has expanded its foray into mass-market banking and launched a charm offensive towards investors, holding the first investor day in its 150-year history and pledging that returns on tangible equity will be nearly one-third higher by 2022.

The target would be met, Goldman said, in part through a rigorous programme of cost-cutting for which it set a target of $1.3bn in savings over the next three years.

The bank disclosed last month that Mr Solomon was granted a $27.5m compensation package for his work in 2019, making him Wall Street’s second-best paid bank boss.

Among his other initiatives, he has encouraged casual dress at work and moved high-ranking executives to a lower floor of the bank’s Manhattan headquarters to promote more mingling with the rank and file.

The jet orders, which were first reported by Bloomberg, may sit uneasily with Mr Solomon’s effort to rehabilitate the image of a company that in some quarters had become a byword for Wall Street greed.

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Writing in the Financial Times last year, he laid out a plan for Goldman that embraced the theme of making business more profitable and more sustainable at the same time.

“If business in partnership with government cannot adapt the global economy to avoid the worst impacts of climate change and generate inclusive growth that lifts people out of poverty and expands the middle class,” Mr Solomon wrote, a few weeks after the Goldman jets were ordered, “the negative consequences will be vast.”

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