Amidst internal discontent and negative media attention, Goldman Sachs CEO David Solomon continues to maintain the support of the bank’s directors and several top shareholders. Solomon is navigating what has been described as the most challenging period of his nearly five-year tenure, marked by declining profits, a dip in morale, and unfavourable press coverage. The recent New York Magazine article that questioned his leadership aptitude was part of a string of reports highlighting tensions within Goldman following a disappointing bonus cycle, the departure of senior bankers, and reservations about Solomon’s direct leadership approach.
Although dissent and media coverage are anticipated to be topics at an upcoming board meeting, insiders familiar with the thinking of some board members, who recently convened in India, reveal that they have so far stood by Solomon. They perceive much of the criticism as unjust and external noise. One source stated, “They feel most of this stuff is unfair to what the reality is.”
Solomon chairs Goldman’s 13-person board, and some individuals who interact with multiple board members characterise them as being a patient group overall. This perspective is founded on their belief in not being unduly swayed by public pressure. A question arises as to whether their patience might have been excessive and overly accommodating towards the executive team.
Such patience finds support among major shareholders as well. While acknowledging staff dissatisfaction, one top 10 shareholder commented that Solomon has effectively served shareholders as CEO. This shareholder compared the employee discord to the Sendero Luminoso, a Maoist guerrilla group in Peru, suggesting it will likely diminish over time as long as the bank’s performance remains solid.
To strengthen investor relationships, Solomon has adopted a different approach from his predecessors. Initiatives such as hosting the bank’s inaugural investor day and conducting more frequent shareholder meetings have been part of his efforts.
Despite this, there is forgiveness among some shareholders for what is widely seen as Solomon’s most significant strategic misstep—the ill-fated venture into retail banking that began under the prior CEO, Lloyd Blankfein. While acknowledging the flawed execution, shareholders commend Solomon for acknowledging the mistake and subsequently downsizing the business.
Goldman Sachs declined to comment on the matter. Earlier this year, there were reports of internal unrest and low pay at the bank. The situation garnered enough negative media attention that Solomon reportedly addressed it in a private meeting with top executives, expressing concern that media leaks were harming the bank. Charles Elson, a director at the University of Delaware’s John L Weinberg Centre for Corporate Governance, noted that while decisions shouldn’t be based solely on news stories, a consistent pattern of media coverage serves as a red flag that deeper investigation might be needed.
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