In a race against looming changes to the tax code, Goldman Sachs handed out millions of dollars worth of stock awards to hundreds employees.
The move will save the firm an estimated $140 million on its tax bill next year, a source familiar with the matter told CNNMoney.
According to public filings posted Friday, 10 Goldman executives — including CEO Lloyd Blankfein and much of the company’s C-Suite — were given stock awards worth a combined $94.8 million on Thursday, the filings indicate. But the those stocks weren’t supposed to be delivered until January.
The source said that about 300 other Goldman employees also received early delivery this week. The total amount of those awards were not known and a spokeswoman declined to comment on the value.
Goldman said in a public filing that it moved the awards into 2017 because of “changes in U.S. tax law.”
The new law marked the most sweeping overhaul of the U.S. tax code in 30 years. It included a big cut to the corporate tax rate, lowering it to 21% from 35%.
But it made many other changes, and companies are scrambling to adapt. The law was signed by President Trump just before Christmas and most provisions go into effect on January 1.
One provision changes how much companies can deduct for the compensation they pay executives, said Jared Walczak, a senior policy analyst at the nonpartisan Tax Foundation.
Under current law, companies can only deduct up to $1 million per executive, but performance-based pay is excluded from the cap. Starting January 1, that performance-based compensation will count toward the $1 million.
That will effectively remove the tax incentive for companies to tie pay to performance, while keeping base salaries under $1 million.
In a related move, Netflix also reacted to the new tax law by changing its executive compensation plan for 2018.
The company said in a public filing posted Thursday that it’s going to start paying some of its top executives higher salaries, and tie less of their compensation to performance, citing the law change.
