The notion that David Solomon is on the verge of getting fired from the highest of Goldman Sachs, the distinguished investment bank, is actually not a latest one.
Solly’s p.r. team describes the incessant grousing about his leadership of the bank as noise, however it isn’t. Some powerful people inside Goldman and in retirement want Solomon out. They’ve for some time and he knows it, regardless of what the flacks are saying.
Yet, the undeniable fact that he’s still within the job shows that Solomon has more endurance than the defenestration buzz would suggest, individuals with first-hand knowledge of the Goldman CEO machinations tell me.
“DJ D-Sol” will not be home-free, but barring something incredibly unexpected (which on this crazy world is at all times possible) he isn’t going anywhere anytime soon.
“I’ve been in lots of board rooms when a CEO’s future comes up,” says a senior Wall Street attorney who advises boards and knows most of the key players contained in the Goldman rat race. “They typically ask two questions, how bad will we look since we’re the blokes who put him there? Then who do we have now to interchange him with?”
So let’s start with query No 1: How bad will the Goldman board look if it sent Solomon packing?
A Solomon quirk that has made his tenure fraught is his side gig as a DJ in the summertime Hamptons party circuit.Reuters
Pretty bad, my lawyer source tells me. In spite of everything, they gave him the job nearly five years ago despite, as I reported back in December when the Solly-ouster rumors first began, Solly’s decidedly un-Goldman-like traits.
One Solomon quirk that has made his tenure fraught nearly from day one is his side gig as a DJ in the summertime Hamptons party circuit, where he goes by the name DJ D-Sol.
Goldman CEOs go on to grow to be treasury secretaries, governors, and senators after they leave the job. DJ D-Sol will likely be spinning records when he’s through.
Insider on the surface
His predecessor Lloyd Blankfein, for one, has not been bashful in privately bashing Solomon for his DJ side hustle; he thinks it cheapens the Goldman brand (Blankfein didn’t return a request for comment). Solly, meanwhile, is a refugee from Bear Stearns, a sharp-elbowed investment bank that blew up through the 2008 crisis. He joined Goldman in 1999 but still has the taint of being somewhat of an outsider in Goldman’s cliquish corporate culture.
There have been self-inflicted wounds, as well. He doesn’t seek the advice of with quite a lot of people before handing down his edicts, again something said to be very un-Goldman-like, where rainmakers just love having their frailer egos stroked by the boss.
He botched Blankfein’s ill-fated foray into consumer banking. Goldman got caught flat-footed during last yr’s deal drought. Solly scrambled to chop costs and staff dramatically, while Goldman’s stock suffered.
Solomon’s predecessor Lloyd Blankfein, for one, has not been bashful in privately bashing Solomon for his DJ side hustle.Getty Images for The Latest York Times
Then he pissed off Goldman’s powerful trading desk (skeptical of investment bankers like Solly to start with) when he diverted trading profits to the banking side to support its bonus pool during last yr’s deal drought.
Yes, there’s plenty of grousing about what I just laid out. Yet none of that is prone to get Solly fired anytime soon, my lawyer source and my sources contained in the place tell me.
They point to the all-important Goldman stock price. Since Solomon became CEO, the stock has largely kept track with an on-again, off-again bull market. It’s up around 40% by my calculations, in comparison with a 50% rise within the S&P.
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Bank is rolling in it
The firm still ranks high in deal-making; its traders are making plenty of money. It’s hard to make a case that Solomon has damaged the Goldman brand with customers despite what you’re reading. A rash move by the board to jettison him now would do much more harm.
Then there’s the query of his alternative.
“Quite frankly, there are only a few men or women who can do the job of running an enormous investment bank,” my boardroom expert says.
Solomon’s No. 2 is a person named John Waldron, also a savvy dealmaker who is claimed to have a softer touch than Solly with the troops.
His knocks: He’s near Solomon and like DJ D-Sol he’s an investment banker, which makes him suspect with the traders. He’s also an outsider, from Bear Stearns, no less.
“Waldron clearly has what it takes,” my lawyer source tells me. “But you may hear the board asking itself, ‘Is he too near David, so why don’t we just see if we will wait this thing out?’ ”
Again, given all of the noise about Solomon’s future, I wouldn’t be surprised to get up tomorrow and listen to Solly goes to be spinning records full-time. However the smart money is saying we still have DJ D-Sol to kick around a bit longer.
A Goldman Sachs press official declined to comment.
