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Goldman Sachs Taps a New Generation of Leadership Ahead of Deals Boom

The toast of Wall Street has elevated a new generation of executives to run its investment banking and trading operations.

Photo of Goldman Sachs CEO David Solomon
Photo by Maryland GovPics via CC BY 2.0

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No need to accept that LinkedIn DM from a headhunter. You just got promoted.

That was the cheery message for a select few at Goldman Sachs on Tuesday. The toast of Wall Street elevated a new generation of executives to run its investment banking and trading operations, ostensibly to capitalize on an expected boom in equities and deals under President Donald Trump. The move was also clearly designed to block rivals from raiding Goldman’s top talent.

Keeping Everyone Happy

The highly competitive culture at Goldman — internally as much as externally — means the bank’s most gifted staff expect career advancement. And last week, the bank signalled its most senior leaders aren’t going anywhere any time soon.

Goldman handed CEO David Solomon and president John Waldron $80 million retention deals and debuted a new compensation plan that will top up the top brass with a cut of the firm’s lucrative alternative asset funds — in a filing, Goldman’s board hailed the chance to earn carried interest as a benefit normally associated with private equity firms. The other shoe to drop, naturally, was how to keep the ascendant talent on board:

  • Goldman tapped new global co-heads for its equities, fixed income and banking businesses, and reorganized its international division. All told, 15 people were elevated to the bank’s high-ranking management committee, expanding its ranks to 39.
  • Goldman’s board acknowledged in its filing last week the risk of non-traditional competitors like alternative asset managers raiding its ranks — Citadel Securities and Sixth Street are among those who have poached Goldman talent in recent years. There’s also another dimension to the risk: Solomon and the bank’s senior leaders have been trying for the past year to make younger generations of partners feel as though they are still climbing the ranks.

Those who won promotions can’t complain that they’re not being handed real responsibility. Goldman’s global banking and markets business, where many of the changes announced will take place, rakes in two-thirds of the bank’s net revenue. Investment banking fees, in particular, rose 24% year-over-year in the fourth quarter to $2.1 billion as deal activity continued to rebound.

Bank On This: Headhunters targeting their offer sheets to top talent will remain a fact of life for arguably Wall Street’s most fabled firm. But Goldman has plenty to offer current or aspiring partners with its recent performance alone — fourth-quarter profits more than doubled year-over-year to $4.1 billion, and the bank’s stock price has rallied 66% in the past 12 months.