As David Solomon’s tenure as CEO of Goldman Sachs is going through a rough patch, reports of a recent addition to the bank’s board spark recent conversations.
On Monday, Bloomberg reported that the Wall Street giant was wiretapping Tom Montag, a controversial banker who is a former #2 executive at Bank of America. The story portrays the move as a “bolster of support” for his leadership, but many sources have been unable to work out how.
At first glance, Solomon touching an executive who is perceived as friendly is generally considered a “weak move” since it looks like a tacit admission that he doesn’t have the full backing of the board, one in all Goldman’s For Money sources said.
“For those who’re at a point where you would like allies on the board, you are admitting that your board has lost confidence in you,” a Goldman insider told On The Money. “Assigning an ally means David believes he needs more people to weaken those that don’t love him.”
Indeed, sources say the report of Montag’s return to Goldman caused an “outrage” at the bank’s headquarters at 200 West St. in lower Manhattan. That is because Montag is seen by many as a symbol of the old-school Wall Street image the bank has been working on.
![Thomas Montag, from left, John Waldron and David Solomon](https://nypost.com/wp-content/uploads/sites/2/2023/06/tom-montag-goldman-sachs.jpg?w=1024)
“People read that as a big slap,” one source told The Post.
According to long Montag’s Recent York Times profile, his “tough approach increasingly departs from the modern world of finance.” The report also highlighted that Montag had settled an unusually large variety of “credible allegations of misconduct or working in a toxic environment … a few of these complaints were about harassment or gender discrimination.”
That is an ungainly arrangement for Goldman, according to some bankers, provided that this spring Goldman paid $215 million to settle accusations of rampant sexual harassment and discrimination at the company.
A source close to Goldman said talks about joining the 66-year-old Montag to the board have been happening for almost a yr. According to a source, he was chosen for his serious approach to good faith risk management after longtime board member Mark Winkelman retired this spring.
Montag’s nomination has yet to be announced, but a source says it is expected to be confirmed in the coming weeks.
This can come as a surprise to some insiders, with one saying he initially treated the report as a “trial balloon” since it appeared like a bad idea.
A lot of Montag’s former colleagues are also upset that Goldman is supporting the aggressive director. While he worked at Goldman Sachs for greater than twenty years, Montag left the company in 2008 bitterly.
“He left annoyed – he thought he needs to be promoted,” one source told On The Money.
Furthermore, after his departure, Montag tried to bribe a lot of Goldman’s employees, a indisputable fact that didn’t sit well with Goldman’s leadership at the time.
One other source indicated that Montag appeared to have instilled loyalty amongst his employees at Goldman. They would not have followed him otherwise, the source noted.
But when Montag has a deep knowledge of banking, trading and risk management, sources say there are numerous others who even have that knowledge – and that is without baggage.
While many speculate that Montag’s appointment is evidence of Solomon’s insecurities, others say the CEO, who moonlights as DJ D-Sol, believes things will calm down. One source said he believed people would move on and that he was confident he could hang on his perch.
A Goldman spokesman declined to comment.
Nevertheless, skeptical observers don’t expect the drumming of resentment and frustration to subside anytime soon as top talent leaves, layoffs proceed and bonuses disappoint. Grim dealers have noted that Goldman has been omitted of labor on the Cava IPO – the first major public offering of the yr.
Goldman is also facing multiple investigations for disastrous advising Silicon Valley Bank on a capital raise. And last week, CNBC reported that Goldman is likely to make a drastic write-down for its $2.2 billion acquisition of Greensky.
“In the event that they have an explosive neighborhood, perhaps they’ll keep people quiet,” one source mused.