Goldman Sachs CEO still has board and investors on his side

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Goldman Sachs has a love-hate relationship with CEO David Solomon, depending on who you ask.

While recent articles have portrayed Solomon as a poor leader with an even worse attitude responsible for middling profits and an exodus of employees, the investment bank’s board and some of its top shareholders see him as a competent and transparent boss, according to the report. financial times.

That’s just ‘noise’

a recent New York Magazine article titled “Is David Solomon too dumb to run Goldman Sachs?” read as a venting session for embittered employees. The CEO is described as a socially inept bully, pushing employees to the breaking point while taking off on private jets to spin records (his notorious hobby of his) on the company’s dime. The employees say that he is yelling or tense from yelling; even his notes in the documents are often written in ALL CAPS. One of his classmates told him New York Magazine, “He’s a tough guy with a very short fuse.”

But as long as the profits keep coming, investors don’t really care. In 2019 and 2020, the company’s profits fell from the $10.5 billion Goldman earned in 2018, but by 2021, profits have skyrocketed to about $22 billion. And even though profits are down again (in 2022, net income is down about 50%), the bank’s board and its major shareholders remain patient, giving Solomon the benefit of the doubt:

• Since Solomon took over as CEO in 2018, approximately 100 partners have left the company, citing their questionable strategies and attitudes. But all the resignations and negative comments to the press have not fazed shareholders. While he was talking to him FOOT, one jokingly compared it to Sendero Luminoso, former Peruvian rebels that formed in the late 1960s but whose impact has diminished over time.
• Even obvious failures like the push into retail banking, which was established by former chief executive Lloyd Blankfein and pursued by Solomon before cutting back, has not fazed shareholders. “It was a poor execution, but I give him credit for admitting the mistake.”

I’m an open book: Supporting investors cite Solomon’s transparency. For most of its 154-year history, Goldman Sachs was privately owned, and some of its opacity remained after it went public in 1999. But Solomon implemented investor day one and scheduled more regular shareholder meetings. An investor told the FOOT“It’s always better to have transparency, because you’d rather trust numbers than someone’s word.”