Goldman Sachs' exclusive “management committee” of top bankers, which critics say has grown bloated under CEO David Solomon, has some internal ties. are confident that it will get even bigger.
The Wall Street giant plans to make major changes to its powerful committee, known internally as the MC, later this month. The committee currently includes about 30 top executives, a source close to the bank told On the Money.
By some accounts, this is more than double the size of the committee under former Goldman CEO Lloyd Blankfein, when the MC included division heads, chief financial officers, Approximately 12 bank officials were included, including the head of human resources.
Other people at the bank say that while the group is large, it is not at an all-time high.
Now, insiders say Mr. Solomon and executive director John Waldron are looking to further expand MC as the bank struggles to convince high-performing partners to stay despite falling profits. It seems that he is ready to do so.
“They've been telling everyone for months that they were going to revamp the MC,” the source said. “The problem is that they are suggesting a lot of people join.”
Officials said they believed an estimated 24 people could win coveted committee seats ahead of expected announcements that would make changes to the group.
“It's been used as a currency to get people to stay. 'Don't go home, you're MC material,'” the source explained. “Right now, this is a retention tool.”
“It's perceived as having prestige,” another source added. “You are considered to be in the inner circle.”
Still, some say MCs aren't as important as they used to be. In years past, this group was viewed as a relatively nimble team of senior executives who set the company's strategy and executed its vision.
“It was more powerful and interesting when there were 12 people,” the source added. “The bigger you get, the less prestige you have.”
“There's always been a lot of speculation about the management committee at Goldman Sachs, and it's natural for people to come and go over its history. But again, David has no intention of joining the management committee. We have not appointed or told anyone,” Tony Flatt, global head of corporate communications, said in a statement.
More recently, according to one well-placed insider, the host warned Goldman's leadership about leaning too far into consumer banking (a bet that ended up failing). However, he was ignored.
More broadly, MC is so large that we cannot discuss too many sensitive matters for fear of leakage. The group won't even know the bank's profits until all of its thousands of managing directors have access to the numbers at their offices, the people said.
“You can't have 30 or so people in the same room making real decisions about the future of the company,” said a person familiar with the situation. “The more people in the room, the less there is to discuss.”
Sources say this is the worst of both worlds. The group will still be large and unwieldy, but many employees will still be disappointed that they were not hired.
