Since the Wall Street Journal first exposed the fraud at Malaysian sovereign wealth fund 1MDB back in 2015, Goldman and CEO David Solomon have been denying that the bank's role in enabling the perpetrators of the multibillion dollar public swindle, a group that included a corrupt banker and former Prime Minister Najib Razak, was the result of a few bad apples - not the result of a "culture of corruption", as former Goldman banker-turned-cooperating-government-witness Tim Leissner alleged in an affidavit.

But as reports revealing the involvement of senior Goldman executives, including then-CEO Lloyd Blankfein, surfaced, it steadily became harder for the bank to try and pin it all on Leissner and his team in Southeast Asia - particularly after word got around that Blankfein had attended a one-on-one sit down with Jho Low, the banker who facilitated the 1MDB bond offerings underwritten by Goldman (and who is now a fugitive from justice, wanted by authorities in Malaysia and the US).

Facing the threat of lasting reputational damage, and massive fines in both Malaysia and the US, Goldman's board of directors has decided to take action in what looks like a first step toward admitting that Blankfein - whose reputation and legacy at Goldman has suddenly been thrown into doubt - played an important role in helping the bankers who brought in the deal circumvent the bank's compliance controls.

According to the Wall Street Journal, Goldman said in a filing on Friday that it plans to withhold a $14 million deferred cash bonus to Blankfein and instead defer the payout until after an investigation into 1MDB had finished.

Goldman is temporarily withholding a cash bonus that Mr. Blankfein would have been owed under a 2011 award. The bonus was deferred and the ultimate payout was tied to Goldman’s long-term performance. It has roughly doubled from its original $7 million value, according to a Wall Street Journal review of filings. Goldman is also withholding similar bonuses owed to two unnamed former executives. They are, according to a person familiar with the matter, Michael Evans, who was a senior Goldman executive at the time of the 1MDB bond sales, and Michael Sherwood, and senior executive in London who retired in 2016.

According to the filing (cited by FT), the board said "in light of the ongoing governmental and regulatory investigations relating to 1Malaysia Development Berhad ("1MDB")" share awards to all its senior executives could be penalized "if it is later determined that the results of the 1MDB proceedings would have impacted the (Remuneration) Committee’s 2018 year-end compensation decisions for any of these individuals."

Blankfein, who retired as Goldman’s CEO on Oct. 1, was paid $20.5 million in 2018. But even in retirement, the bank could come after compensation that it already paid to Blankfein because it reserves the right to claw back some or all of the executives' pay from 2018. There's nothing like the possibility of having to surrender millions of dollars in already paid comp to make someone reconsider their decision to retire.