As shareholders of Goldman Sachs were showing their disappointment over management's presentations at February's investor day just hours earlier — driving the stock down 3.8% on the day — the firm's chief executive, David Solomon, was floating high above the Atlantic. It's a trip the CEO has made many times before, according to signal data for Goldman's planes and half a dozen people familiar with the CEO's schedule.
While it's common for the leaders of big American corporations to fly on private jets, Solomon broke with Goldman tradition when he scrapped a contract to use fractionally owned planes through NetJets in favor of purchasing two jets outright. The dataset, which runs from January 2022 through March of this year, is derived from the open-source ADS-B Exchange, which pulls data collected from airplane signal receivers around the world. It includes speed, altitude, and time parameters.
Solomon's post-investor day trip was one of 15 trips the larger plane has made to the Bahamas since the beginning of last year, according to the signal data. His short hop after the partners meeting was one of six made by the smaller plane. "I have always thought that you do not use corporate aircraft for personal use," said Charles Elson, a corporate-governance expert at the University of Delaware."It sends a terrible signal to the rest of the organization. Goldman is always tightly run, and a lower-level employee who used a corporate asset for personal use would be discharged. Why is the CEO different? The CEO is not different; the CEO is an employee. With fiduciary obligations, I might add.
Solomon paid for his hotel room Friday night and also paid for a Saturday flight to the Hamptons, because it was personal travel and took place on the weekend, according to an additional person who was briefed on how the travel was invoiced. So far, through April 11, Goldman's stock has outperformed the Standard & Poor's 500 on a total return basis during Solomon's tenure, as have the shares of competitor Morgan Stanley, whose CEO also uses the company's planes for personal trips.
Goldman Sachs' time-sharing agreement requires executives using the plane for personal reasons to cover the cost of fuel, hotel and food for the flight crew, hangar fees, insurance, and landing fees, among other expenses. The invoice must be paid within 60 days.
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