Goldman CEO recommends replacement

Lloyd Blankfein was about to bet the future of Goldman Sachs.

It was Feb. 21, and Blankfein had gathered with the Goldman Sachs board to reveal his longawaited recommendation for the bank’s next chief executive officer — the one who would steer the Wall Street giant through the next phase of its 149-year history. His pick: David Solomon. That decision, embraced by the board that Wednesday, has now officially set in motion one of the most closely watched successions in global finance. With the formal announcement of the move on Monday, Solomon’s chief rival for the job, Harvey Schwartz, abruptly announced his resignation. The job is, in effect, now Solomon’s to lose.

His rise to heir apparent prompts a host of questions for Goldman, including the big ones: when exactly will Blankfein make his handoff, and what will Solomon do then?

Blankfein and the board were impressed, insiders say, by Solomon’s proven ability to build businesses at a time when the bank is looking to grow, the strength of the investment-banking team he put together, and his efforts to recruit and retain talent.

Blankfein traveled the week after the board meeting and didn’t have a chance to discuss the decision with the two executives. It was only last week that Blankfein told them about the board’s call, one of the people said.

Schwartz will leave the bank on April 20, and Solomon will serve as the sole president and chief operating officer, the New