Goldman Sachs CEO David Solomon isn’t on the brink of fire you in the approaching weeks — but he may persuade you to point out yourself the door.
Insiders on the Wall Street giant say employees are on edge at first of 2024 following a traumatic 12 months that had kicked off with “David’s Demolition Day” — a cold morning last January when the bank fired 3,200 employees.
But this month, with compensation slated to be announced the week after next, laggard employees usually tend to get a piddling year-end payout than a pink slip, in accordance with sources near the firm.
That’s despite the proven fact that last 12 months the bank fired underperformers the week before it announced compensation — a practice that may save banks from doling out bonuses to outgoing employees.
Goldmanites were heartened that Solomon’s holiday audio message to employees last week was far cheerier than it was the 12 months before, when he warned that mass layoffs would begin imminently.
Laggard employees usually tend to get a piddling year-end payout than a pink slip, in accordance with sources near the firm. Paola Morrongiello
One source described this 12 months’s message as “scripted and rosy.”
“It was a relaxed message – thanks for working hard and have holiday,” the source said.
“Because the 12 months draws to a detailed, I desired to convey my deep appreciation to all of you in your dedication and commitment to our culture, our clients and the firm more broadly,” Solomon said within the audio message obtained by On The Money.
CEO David Solomon said he expects 2024 “will probably be an exciting and productive 12 months.” REUTERS
“I won’t make predictions. The environment can at all times shift again, but I see reason for confidence that 2024 will probably be an exciting and productive 12 months ahead for Goldman Sachs, where the facility of our client franchise allows us to proceed to distinguish ourselves in compelling ways.”
Stay On the Money
Essential weekly read to fuel business lunches.
Nevertheless, sources with knowledge of management’s considering say CEO Solomon and his team are betting on laggard employees leaving after getting disappointing bonuses.
Top brass can be optimistic that the market will take off, that dealmaking will resume — and that Goldman will need numerous bankers to get the work done.
If anything, some on the firm are concerned the bank might even see more exits than they’d like.
In an announcement, a spokesperson for Goldman said, “Our compensation philosophy hasn’t modified, we’re at all times focused on investing in our people, especially our top performers. We’re not going to comment on speculation across the compensation cycle.”
Solomon has also emphasized the importance of paying for good people.
On the FT’s Global Banking Summit, Solomon said that Goldman will “pay for performance.”
Sources note that given the multiple rounds of cuts in 2023, there isn’t any fat left to trim — and that the larger concern needs to be about retaining the highest performers after what will probably be a dismal round of bonuses.
“The issue is bad people find yourself staying and good people leave” too often, a source says of retention on the firm.
