- On Monday, Goldman Sachs announced that co-COO Harvey Schwartz would be retiring, setting the stage for co-COO David Solomon to succeed CEO Lloyd Blankfein.
- Reports suggest the transfer of power could come as soon as the end of this year.
- Solomon is an unconventional Wall Street figure, and his position as heir apparent hints at cultural change at a firm that fancies itself the Google of Wall Street.
In mid-February, one month before he would become the clear heir apparent to Goldman Sachs CEO Lloyd Blankfein, co-COO David Solomon was on a stage cracking jokes with billionaire playboy Richard Branson — a man who’s large blonde mane and puckish, freewheeling demeanor seemed at odds with that of the stodgy, white-shoe investment bank.
The contrast was lost on few, least of all the two men sharing the stage at the Goldman Sachs Small Business Summitt.
“This is a Goldman Sachs conference, sorry,” Branson quipped after drifting into a tangent about his ineptitude at rolling joints despite learning from the Rolling Stones’ Keith Richards, sending Solomon and the lively audience into stitches.
Two sex jokes later, the founder of the Virgin business empire asked whether they wanted to “change the Goldman Sachs brand quickly and put something else up?”
“It’s an interesting marriage of brands,” Solomon allowed amid chuckles, before wryly suggesting that Goldman’s “could move in your direction a little bit.”
It was seemingly said in jest, but Solomon’s desire to make Goldman Sachs a bit more Branson-esque likely contained a kernel of truth.
If you thought the bank was starting to let its hair down in recent years as Blankfein took a shine to Twitter, prepare for further departures when Solomon — an unorthodox bank executive who famously moonlights as a DJ— takes the helm.
With the announcement Monday that co-COO Harvey Schwartz, a veteran of Goldman’s vaunted trading desk, would retire in April, Solomon appears to have won the two-man bake-off for Goldman’s top job.
And if last week’s innuendo that Blankfein could depart by year’s end comes to fruition, changes could come quicker than anyone realized.
“We were expecting it to come to a conclusion at some point, but for it to happen this quickly was a surprise,” Brian Kleinhanzl, a manager director and lead bank analyst for Keefe, Bruyette, and Woods, said of Goldman’s succession announcement.
But the decision, given where Goldman’s businesses and its culture are headed, makes sense.
Solomon is not only an admirer of Branson’s and an occasional guest at the billionaire’s private island, he’s of a similar mold, too — especially compared with the man he beat out, an old-school trading stalwart more in line with Goldman’s past than where it wants to go in the future.
“He’s a respected manager there, he’s certainly a capable leader,” Kleinhanzl said of Solomon. “It lines up with the direction that they’re moving in that a lot of their growth areas tend to be away from the trading business.”
The CEO for Goldman’s next chapter
Goldman Sachs hasn’t hidden its aspirations of becoming the Google of Wall Street, and Solomon is well-suited for navigating that transition.
Before taking the co-COO role, Solomon had been a co-head of investment banking in New York for a decade. In recent years, though, he’s had an intimate role in some of the bank’s less traditional projects — such as its efforts to build the ultimate financial destination for the masses under its Marcus brand.
Key to growing its tech-intensive businesses — which are central to the $5 billion in new revenues Goldman is chasing — will be landing young talent with a different skill set than the classes of traders and investment bankers of years past.
Even a revered brand like Goldman Sachs must compete aggressively to land tech-savvy millennials amid the temptations of a the liberated corporate lifestyle offered by Silicon Valley’s top companies.
Solomon could provide a strategic advantage in appealing to young candidates, Kleinhanzl said, given his unique pedigree and interests.
The decision to go with Solomon shows that Goldman Sachs likes to “think of themselves as a tech company, and you have to have some bit of irreverence at the top of management in that kind of company,” Kleinhanzl said. “And David kind of fits that M.O. given his background and given some of his interests.”
Solomon’s trajectory to Goldman Sachs stardom was less-than-typical— he skipped the Ivy League and studied political science at Hamilton College in upstate New York.
And his presence since becoming a Wall Street exec has been unconventional, and increasingly public, as well.
He’s partied with the likes of Diddy, and once gave life-changing career advice to the Philadelphia 76ers guard J.J. Redick.
The divorceé and lifelong audiophile has also famously been spinning records in Manhattan clubs known for being “millionaire playpens” as well as beach parties in the Bahamas overrun with bikini-clad millennials.
The Wall Street veteran says finding and exploring a passion is crucial to longevity in a career known for grinding people down and burning them out.
“If you can’t find a way to have passions and pursue those passions and mix them into your professional life and your personal life in some way, shape or form, it’s just harder to have the energy to keep on doing this, and to keep moving forward professionally,” Solomon said on a Goldman Sachs podcast.
On that front, Solomon already has experience making the notoriously grueling entry-level job at Goldman a bit more millennial friendly. He played an important role in revamping the investment bank’s junior-banker policies, including quicker promotions and expanding tech platforms that can handle some of grunt work associated with junior-level banking.
Goldman’s image has been morphing for several years now, and Solomon has played a key role in the initiatives that are driving the change.
Now that his succession of Blankfein is all but certain, expect the 150-year-old investment bank’s transformation into the Google of Wall Street to only accelerate from here.
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