Goldman Sachs CEO Still Has the Board and Investors in His Corner

(Photo by Connor Lin/The Daily Upside)
(Photo by Connor Lin/The Daily Upside)

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Goldman Sachs has a love-hate relationship with CEO David Solomon, depending on whom you ask.

While recent articles have painted Solomon as a poor leader with an even poorer attitude who’s responsible for middling profits and an exodus of employees, the investment bank’s board and some of its biggest shareholders view him as a competent and transparent boss, according to the Financial Times.

That’s Just ‘Noise’

A recent New York Magazine article titled “Is David Solomon Too Big a Jerk to Run Goldman Sachs?” read like a venting session for embittered employees. The CEO is described as a socially inept bully, pushing his employees to the breaking point while he zooms off on private jets to spin records (his notorious hobby) on the company’s dime. Employees say he’s either yelling or strained from yelling; even his notes on documents are often typed in ALL-CAPS. One of his colleagues told NYMag, “He’s a tough guy with a very short fuse.”

But as long as the profits keep coming, investors don’t really care. In 2019 and 2020, company profit slipped compared to the $10.5 billion Goldman made in 2018, but by 2021, profits shot up to roughly $22 billion. And even though profit is down again — 2022 saw net income drop about 50% — the bank’s board and its top shareholders remain patient, giving Solomon the benefit of the doubt:

  • Since Solomon took over as CEO in 2018, roughly 100 partners have left the firm, citing his questionable strategies and attitude. But all the quitting and negative comments to the press hasn’t fazed shareholders. While speaking to the FT, one jokingly compared it to the Sendero Luminoso, erstwhile Peruvian rebels who formed in the late 1960s but whose impact has diminished over time.
  • Even obvious failures like the push into retail banking, which was established by former CEO Lloyd Blankfein and pursued by Solomon before cutting back, hasn’t perturbed stockholders. “It was poor execution, but I give him credit for admitting the mistake.”

I’m an open book: Supportive investors cite Solomon’s transparency. For most of its 154-year history, Goldman Sachs was privately owned, and some of its opaqueness carried over after it went public in 1999. But Solomon implemented the first investor day and scheduled more regular shareholder meetings. One investor told the FT, “It is always better to have transparency, because you would rather trust the numbers than someone’s word.”