SOL’S ‘WEAK MOVE’
‘Packing’ board with pal
APeople are reading this as a big slap in the face.
— Goldman insider
S David Solomon’s tenure as CEO of Goldman Sachs hits a rough patch, reports of a new addition to the bank’s board are provoking fresh chatter.
On Monday, Bloomberg reported the Wall Street giant had tapped Tom Montag, a controversial, hard-charging banker who is the former No. 2 executive at Bank of America. The story cast the move as Solomon “shoring up support” for his leadership, but multiple sources couldn’t figure out how.
On the face of it, for Solomon to tap a director who is viewed as friendly is generally considered a “weak move,” since it looks like a tacit admission that he doesn’t have the full support of the board, one Goldman insider told On the Money.
“If you’re at the point you need allies on the board, you’re admitting your board has lost confidence in you,” a source said. “Appointing an ally means David thinks he needs more people to dilute those who dislike him.”
Indeed, sources said the report of Montag’s return to Goldman sparked “outrage” inside the bank’s headquarters at 200 West St. in lower Manhattan. That’s because Montag is seen by many as emblematic of the old-school Wall Street image the bank has worked to shake off.
“People are reading this as a big slap in the face,” one insider told The Post.
According to a lengthy New York Times profile of Montag, his “hard-driving approach has been increasingly out of step with the contemporary world of finance.”
The report also highlighted that Montag settled an unusually large number of “credible allegations of misconduct or of working in a toxic environment . . . some of those complaints alleged gender-based harassment or discrimination.”
$215M settlement
That’s an awkward fit for Goldman, according to some female bankers, given that Goldman this spring paid $215 million to settle accusations of rampant sex harassment and discrimination.
A source close to Goldman said talks for the 66-year-old Montag to join the board have been going on for nearly a year. He is being picked for his serious risk-management bona fides after longtime board member Mark Winkelman retired this spring, according to the source.
On Thursday, the board nominated Montag as an independent director, according to a filing. The appointment is subject to full board approval. The move comes as a surprise to some insiders, with one saying he initially took the report as a “trial balloon” because it seemed like such a bad idea.
Many of Montag’s former colleagues are also upset that Goldman is embracing the aggressive executive. While Montag worked at Goldman for more than two decades, he left on a sour note in 2008.
“He left in a huff — he thought he should’ve been promoted,” one source told On the Money.
And after his departure, Montag tried to poach many Goldman employees — which did not ingratiate him to leadership.
While many speculate the Montag appointment is evidence of Solomon’s insecurity, others say he believes everything will quiet down. One source said Solomon believes people will move on and he’s confident he can hang onto his perch. A spokesperson for Goldman declined to comment.