The notion that David Solomon is on the verge of being knocked off the highest of the distinguished investment bank Goldman Sachs is actually not latest.
Solly’s PR team describes the constant complaining about his leadership on the bank as noise, however it’s not. Some powerful people in Goldman and retired want Solomon gone. They’ve for some time and he knows it, regardless of what the center say.
However the proven fact that he’s still at work shows Solomon has more endurance than the defenestration hype would suggest, individuals with first-hand knowledge of Chairman Goldman’s machinations tell me.
“DJ D-Sol” will not be home free, but apart from something incredibly unexpected (which is at all times possible on this crazy world), he isn’t going anywhere anytime soon.
“I have been to a variety of boardrooms as the CEO future looms large,” says a senior Wall Street lawyer who advises boards and knows lots of the key players in Goldman’s rat race. “They sometimes ask two questions: how bad can we look if we put it there? So who should we replace him with?”
So let’s start with query #1: How bad will Goldman’s board look if he sends Solomon packing?
Pretty bad, my lawyer tells me. In spite of everything, they gave him the job almost five years ago, although, as I reported back in December, when rumors of Solly’s ouster began, Solly’s qualities were definitely nothing like Goldman’s.
One in all Solomon’s quirks that made his tenure tense almost from day one is his additional appearance as a DJ at summer parties within the Hamptons, where he performs under the stage name DJ D-Sol.
Goldman’s CEOs develop into treasury secretaries, governors, and senators after they leave their jobs. DJ D-Sol will probably be spinning records when he’s done.
Insider outside
His predecessor Lloyd Blankfein, for instance, wasn’t shy about privately bashing Solomon for his side job as a DJ; believes this lowers the worth of the Goldman brand (Blankfein didn’t reply to a request for comment). Meanwhile, Solly is a refugee from Bear Stearns, a sharp-elbow investment bank that exploded throughout the 2008 crisis. He joined Goldman in 1999 but still carries the stamp of being an outsider to Goldman’s corporate culture.
There have also been self-mutilations. He doesn’t seek the advice of a variety of people before issuing his edicts, again something that is said to be very unlike Goldman where the rainmakers just love having their weaker egos stroked by the boss.
He tousled Blankfein’s ill-fated foray into consumer banking. Goldman was caught flatfoot during last yr’s trade drought. Solly sought to drastically cut costs and staff while Goldman’s stock suffered.
He then pissed off Goldman’s powerful trading office (skeptical of investment bankers like Solly) when he funneled trading profits to the banking side to support the bonus pool during last yr’s trading drought.
Yes, there is a variety of complaining about what I just presented. Nonetheless, none of it will get Solly fired any time soon, my lawyer and my sources at the location have told me.
They point to an important Goldman share price. Since Solomon became CEO, stocks have largely kept up with the bull market, which has been repeating itself. In accordance with my calculations, this is a rise of about 40%, in comparison with the 50% increase of S&P.
The bank spins in it
The corporate continues to rank high in deal making; its traders make a variety of money. It’s hard to prove that Solomon hurt the Goldman brand amongst customers, despite what you read. A hasty move by management to fireside him now would do much more damage.
Then there is the query of his successor.
“Truthfully, there are only a few men and girls who can do the job of running a significant investment bank,” says my board expert.
Solomon’s Number 2 is a person named John Waldron, also a shrewd trader who is said to have a softer touch with the soldiers than Solly.
Strengths: He is closely related to Solomon and, like DJ D-Sol, is an investment banker, which makes him suspicious of traders. He is also an outsider, no less from Bear Stearns.
“Waldron clearly has what it takes,” my lawyer tells me. “But you possibly can hear the board asking themselves, ‘Is he too near David, so why don’t we just see if we are able to wait it out?’ “
Again, with all of the hype surrounding Solomon’s future, I would not be surprised to get up tomorrow to listen to that Solly will probably be making records full time. But smart money says we still have DJ D-Sol to play somewhat longer.
A Goldman Sachs press representative declined to comment.