Following what has been a long CEO succession race, the firm has named David Solomon as CEO, marking the start of a new era.
Solomon will replace Lloyd Blankfein after he retires on September 30 as the longest-serving Wall Street CEO after Jamie Dimon of JPMorgan. Solomon will also join the Goldman Sachs board as Chairman in January, with Blankfein serving out his term as Chairman through the end of the year. Blankfein will take the title of Senior Chairman after his retirement.
Solomon currently serves as President and Chief Operating Officer. His CEO appointment has been expected since March, when he was named the sole president of Goldman Sachs after co-president Harvey Schwartz left the firm. The formal announcement, made July 16, means that Solomon can begin making changes to his leadership team. Executive hiring could be on the horizon.
Outgoing CEO Blankfein took the helm in 2006, steering the firm through the financial crisis and subsequent fallout, and later helping to repair Goldman’s public image. Under Blankfein, the firm expanded beyond its beginnings as a pure investment bank into new areas. Its consumer banking business, called Marcus after founder Marcus Goldman, was launched in late 2016.
“The change comes at a turning point for Goldman Sachs, which is trying to generate another $5 billion in annual revenue by growing its fledgling consumer bank, squeezing more from businesses like asset management and changing the way it approaches trading,” Reuters reports.
As with most Wall Street banks, there is a natural tension at Goldman Sachs between traders and bankers. With his CEO appointment secured, Solomon will need to foster cooperation from the two sides in order to enact the revenue growth plan, which calls for re-casting Goldman Sachs as not only a source for merger advice or stock offerings, but as a bank that serves all of customers’ borrowing, trading and money management needs.
Solomon got his start as a banker at Bear Stearns prior to joining Goldman Sachs as a partner in 1999. He ran the leveraged finance unit, and advanced through the investment banking business, earning a reputation for his relationships with key client such as 3M and Disney’s Bob Iger. Solomon is also known for his efforts to improve gender imbalance in the workforce and retain junior bankers.
The CEO succession is being well received. Alan Schwartz, Executive Chairman at Guggenheim Partners, who worked with Solomon at Bear Stearns, said he showed natural leadership qualities early on. “David is a very good big picture thinker while at the same time staying on top of all the details,” Schwartz said. “Finding both in one individual is unusual.”