David Solomon’s ascent at Goldman
When Goldman Sachs Group’s leaders unveiled their strategy six months ago to reshape the Wall Street powerhouse into a more traditional bank, it was trading veteran Harvey Schwartz who led the presentation.
Now, it’s his top rival in the race to become the next chief executive officer, David Solomon, who appears poised to carry out the plan.
The abrupt emergence this week of Solomon, 56, as heir apparent to CEO Lloyd Blankfein marked a dramatic turn in fates for the men who spent 15 months vying as copresidents for the top job — an outcome that will further a significant shift within the firm. Businesses such as investment banking and financing, which Solomon knows better, keep gaining ground on sales and trading, which long propelled Goldman earnings — as well as Blankfein’s and Schwartz’s own careers.
“There’s going to be a power shift, there’s no question about it,” said Charles Peabody, an analyst at Compass Point Research & Trading, predicting it may affect the makeup of the powerful management committee. “Sometime in 2020 is when you’re going to see the real struggle for resources develop” between those two sides, he said.
‘Fresh perspective’
Blankfein and the board were impressed, insiders say, by Solomon’s proven ability to build businesses, the strength of the dealmaking team he assembled and his efforts to recruit and retain talent. Those qualities became even more valuable as the bank decided it had focused too much on hedge funds as trading customers, at the expense of corporations.
In recent years, the firm has leaned more on investment banking and asset management amid an industrywide slowdown in the markets businesses that in 2017 contributed to the worst year for
trading under Blankfein’s watch. The CEO had long sought to preserve the firm’s franchise, predicting activity would pick up.
Big clients
Solomon didn’t get an interview with Goldman Sachs after he graduated from Hamilton College in 1984. Instead, he joined more than a decade later, after earning respect as a competitor. The offer came in 1999 while he was at Bear Stearns Cos. There, he jockeyed with Goldman’s team before the firms ended up collaborating to raise almost $1 billion of high-yield debt to help casino billionaire Sheldon Adelson build the Venetian resort in Las Vegas.