Partners are fed up with Goldman Sachs CEO Solomon turning to the COO
Goldman Sachs CEO David Solomon is facing increasing turmoil over his harsh leadership style, failed ventures and a mass exodus of top talent from the company – and senior bankers are reportedly testing the loyalty of his No. 2 executive.
President and Chief Operating Officer John Waldron has risen from Solomon’s ranks at Goldman since joining the firm in 2000 and has been named the investment bank’s incoming CEO.
As the partners grow increasingly frustrated with their meager bonuses, Solomon’s private jet use, and his sideline as a DJ, they wonder if Waldron will be able to step out of Solomon’s shadow and forge his own path.
“What do you do when you’re #2?” asked former Goldman partner Robert Mass, who was with the company for 27 years Bloomberg. “Are you different and showing that you are different, or are you showing support?”
According to Bloomberg, in July, Waldron sparked rumors of a leadership change in a conversation with senior dealmakers in the Hamptons about Goldman’s current challenges.
Waldron said whoever is at the helm in two years’ time is likely to be at the helm of a much cleaner company, sparking a range of theories among Goldman bankers about whether Solomon planned his handover, the news service reported.
A company spokesman told The Post that Waldron’s comments had been misinterpreted by colleagues and that he was actually referring to when the company would deliver more stable returns.
“The executive team is focused on executing our strategy and the performance of the company, not speculation,” said company spokesman Tony Fratto.
Waldron, 54, is reportedly more diplomatic than Solomon, 61, who is no stranger to dismissing critics unenthusiastic about his bold but ill-fated foray into retail banking.
As Bloomberg reported, Waldron has been a good listener to his colleagues’ concerns over the past year, acknowledging their frustrations without blatantly betraying his boss.
Solomon and Waldron have long had a deep bond. They first worked together in the early 1990s at Bear Stearns, where Waldron began his career as an investment banking analyst since Solomon was already a gruff head of the firm’s junk bonds department.
According to Bloomberg, Solomon left Bear Stearns in 1999 and went to Goldman. A year later, he recruited Waldron to the bank.
In 2018, Goldman’s board of directors named Solomon top boss and he named Waldron sole president.
Waldron has been a staunch servant of the Wall Street giant throughout his 22-year tenure, even turning down an offer from private equity firm Carlyle Group last year when its CEO Kewsong Lee suddenly quit, according to the psychic he was a obvious candidate for Solomon’s successor.
However, there’s still a chance that Waldron could meet the same fate as Gary Cohn, who has served as Goldman’s president and co-COO alongside Solomon since 1990.
After spending 26 years with the company, Cohn slipped the top spot and went to Solomon.
Under Solomon’s rule, the 154-year-old bank has smashed all records, including in 2021, when Goldman reported a 66% increase in third-quarter profit to $5.28 billion after experiencing a tidal wave of M&A activity, that boosted profits, the company struggled to handle an unprecedented volume of transactions.
The lucrative moment was short-lived, however, and Solomon has seen declining sales and failed business ventures ever since. Last month, Goldman reported terrible second-quarter earnings, falling a whopping 58%.
It was just the latest in a string of brutal earnings reports that caused Goldman’s 2022 net income to fall 48% year over year to $11.3 billion.
As a result, Solomon’s salary was cut to $25 million — a 30% decrease from 2021, and the company laid off thousands of workers to offset falling earnings.
Solomon’s compensation includes an annual base salary of $2 million and variable compensation of $23 million, of which $16.1 million is in restricted stock units. That means the payment won’t be available for several years, according to a publicly available filing.
