As cost-cutting becomes a growing trend on Wall Street, senior leadership at Goldman Sachs seems to be flying high regardless.
RIABiz reported that the New York City investment bank's CEO David Solomon and president John Waldron have drawn criticism from shareholders due to excessive expenses and compensation — namely the two private jets owned by the bank. Not only are these financial decisions being made during a period that Goldman itself says could likely turn into a recession, but the environmental impact of these jets is significant.
A study from Nature's Communications Earth & Environment journal found that last year alone, 250,000 people caused 17.2 million tons of carbon dioxide to enter the atmosphere through private jet usage. The worst polluter pumped 2,645 tons of carbon dioxide into the air, more than 500 times the average person's output of 5.2 tons per year.
Making matters worse are "empty legs": when planes fly the routes without passengers on the way to pick up these high-powered people or return to their home base without passengers once they reach their initial destination. Goldman Sachs even put up a job posting recently to hire an associate to handle these logistics, offering a $160,000 salary to ensure the planes meet the executives where and when they need them.
If the bank's Gulfstream G650ER jet were to carry just one passenger, the flight would be about 80 times more polluting per person than a commercial flight, according to an analysis of the aircraft, which Nike executives also happen to use. Tack on an empty leg, and that impact doubles.
While Goldman Sachs justifies the two jets as business expenses, a Business Insider report noted that Solomon, in particular, often takes the jet for personal use, visiting his property in the Bahamas.
According to a report from leading proxy adviser Glass Lewis, in this financial climate, the move doesn't sit well with shareholders. "Concerns surrounding the company's continued inability to align pay with performance are exacerbated by the decision to grant excessive retention awards … the rationale … is far from robust," it said.
Wealth continues to grow on Wall Street, and emissions concerns often follow. As Stefan Gössling, co-author of the Nature private jet pollution study, put it: "We have seen a constant increase, suggesting that wealth growth is the main driver."
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