Donald Trump’s chief economic advisor set to receive $284m payday from Goldman Sachs

Gary Cohn, the former president of the Wall Street investment bank, is cashing in shares as they hit record highs; markets predict Trump's policies will be friendly to Goldman

Former Goldman Sachs president Gary Cohn will head up the President's economic council (Reuters)

Gary Cohn’s jump from Goldman Sachs to Donald Trump’s administration is helping him unlock more than $284m (£227m) in bonuses, shares and other investments through the Wall Street bank.

Cohn is selling his Goldman stock as it trades near a record high on speculation Mr Trump’s policies – on which he will advise – will be a boon for the bank.

In an attempt to assuage conflicts of interest as Mr Trump’s top economic advisor, the bank is letting its former president immediately collect about $65m in cash and stock tied to its future performance.

That’s on top of roughly $220m of Goldman equity he already held or was awaiting, as well as stakes in company-run investment funds, according to regulatory filings on Tuesday. He must liquidate the holdings to take his new post.

Diversifying his holdings will lower his risk for major losses if the firm stumbles in years ahead. That turned out to be an advantage for former chief executive Henry Paulson, who sold off his stock in the bank to become US Treasury Secretary in 2006 just before the global financial crisis.

“Fortuitously, all of this divestiture happens as stock in Goldman Sachs hovers near a multi-year high,” said Frank Glassner, chief executive of Veritas Executive Compensation Consultants. But “it’s not like he’s jumping out of an airplane that’s headed down”. And being forced to quickly sell stakes in Goldman’s buyout and hedge funds probably means Cohn is “stepping out of that stuff at a discount”, he said.

Cohn was already free to sell some of the stock holdings before his career change, but a large disposal would have been awkward, because investors may have viewed it as signalling a lack of confidence in the company’s future, Glassner said.

Cohn will also be able to defer significant taxes as he sells, assuming he puts the proceeds into government securities or certain mutual funds. The extent of that benefit will become clearer when authorities release his financial disclosures for joining the government. He didn’t immediately respond to a request for comment.

Bloomberg