Goldman Sachs CEO David Solomon is reportedly increasing his involvement in the bank’s day-to-day operations, as concerns over his possible departure disrupt a high-profile succession battle. This is an obvious effort to dispel speculation.
Mr. Solomon, who has overcome controversy over his part-time DJing and reportedly promised last year to stop performing at public events, has told Goldman executives in recent months that he plans to stay on for a while. Sources familiar with the matter said that he had made this clear. told the Wall Street Journal.
Mr. Solomon’s increased control over the firm raises questions about the future of John Waldron, Goldman’s president and chief operating officer, who was widely believed to be the frontrunner to become Goldman’s next CEO. Goldman recently posted its lowest annual profit since 2019 after losses from a failed expansion into consumer banking.
Senior bankers are reportedly already testing Mr. Waldron’s loyalty, saying that he, who joined Goldman in 2000 and has risen through the ranks at Goldman since joining Mr. Solomon, is pursuing his own path. He was trying to figure out whether to cut it open or not.
Some insiders told the Journal that they believe Waldron will lose the race to ultimately succeed Mr. Solomon, 62, but that there is a better chance for others to swoop in. There are some too.
“The perception of CEO succession and timing at Goldman Sachs has been a popular pastime for decades,” Jennifer Zuccarelli, a Goldman spokeswoman, told the Post.
“People make assumptions, make up their own versions of stories, and connect dots from unrelated events. The truth is, David and John didn’t change anything; they showed us something different. Not that there is.”
Waldron and Solomon declined interview requests from the Journal, but the two reportedly remain close after working together at Bear Stearns in the ’90s.
Goldman spokesman Tony Fratto added: “David has never given a timeline.” However, Wall Street expected Mr. Solomon to retire as early as this year, he said.
In another sign of Mr. Solomon’s growing power, Goldman’s top banker Jim Esposito, who had been seen as a potential successor to Mr. Solomon someday, abruptly resigned last month.
Mr. Esposito, 56, was a college wrestling enthusiast who played a key role in the merger of Goldman’s investment banking and trading divisions, only to realize that his path to eventual CEO or president status was closed. When this became clear, I decided to retire after 30 years of activity. The Journal reported at the time.
Meanwhile, Mark Nachman, head of wealth and asset management, and Dan Dees and Ashok Varadhan, co-heads of global banking and markets, have emerged as stars within the company, the paper said.
After Goldman’s bold and ill-fated foray into consumer banking, Goldman has become more focused on its two core businesses.
Goldman’s principal director, Adebayo Ogunlesi, recently endorsed Mr. Solomon and told the executive committee that the board has confidence in Goldman’s leadership and strategy, the paper said.
But the bank’s public has been less supportive of branch managers in recent months.
Mr. Solomon’s sharp management style and shallow bonuses have sparked rumors that Goldman is experiencing a larger-than-expected talent exodus this spring, people familiar with the matter told the Post in November.
Some executives secretly promised Goldman employees that their annual bonuses would be better than last season’s disastrous bonus payout, when the bank’s performance worsened due to the collapse of post-pandemic trading adjustments. However, there were reports that some executives had broken their promises.
However, the bank insists: “Our remuneration philosophy remains unchanged. We are always focused on investing in our people, especially our top performers.”
Officials assured the Post on Friday that “the company’s compensation has increased by $350 million over last year.”
