Market Data 
By Ross Kerber
(Reuters) -Goldman Sachs was urged to separate its CEO and chairman roles held by David Solomon to improve its corporate governance, according to two influential proxy advisers this week.
Glass Lewis and Institutional Shareholder Services (ISS) recommended the split roles in separate reports.
An independent chair “is nearly always preferable to having a single individual lead both the board and the executive team,” Glass Lewis wrote on Thursday, reiterating its recommendation from last year as a matter of good corporate governance.
In the wake of the 2008 financial crisis, efforts to separate the chair and CEO roles became flashpoints at the annual meetings of Goldman Sachs and other Wall Street giants like JPMorgan Chase (NYSE:) as investors looked to improve risk oversight.
Banks fended off these calls by making other changes, such as giving new powers to a lead independent director, which Goldman did in 2013.
Investors’ focus on potential conflicts of interest has been revived lately, Tony Carideo, president of The Carideo Group, a corporate elections inspection service.
“Shareholders see it as an ‘agency problem’ where the CEO has interests and a chair could have different interests,” Carideo said.
The joint positions are a common feature at U.S. banks and do not pose a concern, said Mark Narron, a senior director at Fitch Ratings. However, “it’s probably incrementally positive to separate those roles,” he added.
Glass Lewis also recommended investors cast advisory votes against compensation at Goldman.
Shareholders “should be wary of the continued disconnect between pay and performance,” Glass Lewis wrote, citing pay for Solomon and other top executives that was above the median for its peers.
Compensation for Goldman’s top three executives jumped by an average of nearly 24% for 2023 even as its profit fell 24%, according to company filings.
ISS cited Solomon’s leadership and the bank’s strategy in making its recommendation to split the CEO and chairman roles.
“Solomon’s foray into the consumer realm has been met with missteps and steep losses, which seem to have trickled into further human capital issues,” ISS wrote in the report on Wednesday.
Its assessment marks a change from last year, when ISS recommended against the measure and said at the time there were “no significant concerns regarding the company’s governance practices.”
Goldman Sachs did not immediately provide a comment. On Wednesday, a company spokesperson cited the bank’s recommendation to vote against the independent chair proposal outlined in its proxy statement.
The resolution to split Goldman’s chairman and CEO titles was filed by the conservative-leaning National Legal and Policy Center. A similar measure it filed last year won just 16% support.
Goldman’s annual meeting is slated for April 24. Like ISS, Glass Lewis recommended votes approving all the bank’s director nominees, including Solomon.
The bank appointed David Viniar, who served as its finance chief from 1999 to 2013, as its next independent lead director. He will succeed Adebayo Ogunlesi, who will step down at the annual meeting.
Goldman shares were broadly flat in afternoon trading, lagging major peers whose stocks were up about 1%.
