As David Solomon’s tenure as CEO of Goldman Sachs hits a rough patch, reports of a recent addition to the bank’s board are upsetting fresh chatter.
On Monday, Bloomberg reported that the Wall Street giant had tapped Tom Montag, a controversial, hard-charging banker who’s the previous No. 2 executive at Bank of America.
The story forged the move as Solomon “shoring up support” for his leadership, but multiple sources couldn’t work out how.
On the face of it, for Solomon to tap a director who’s viewed as friendly is mostly considered a “weak move,” because it looks like a tacit admission that he doesn’t have the total support of the board, one Goldman insider told On The Money.
“In case you’re at the purpose you wish allies on the board, you’re admitting your board has lost confidence in you,” one Goldman insider told On The Money. “Appointing an ally means David thinks he needs more people to dilute those that dislike him.”
Indeed, sources said the report of Montag’s return to Goldman sparked “outrage” contained in the bank’s headquarters on 200 West St. in lower Manhattan.
Thomas Montag (from left) John Waldron and David Solomon.Toni Misthos/NY Post
That’s because Montag is seen by many as emblematic of the old-school Wall Street image the bank has worked to shake off.
“Persons are reading this as an enormous slap within the face,” one insider told The Post.
In accordance with a lengthy Latest York Times profile of Montag, his “hard-driving approach has been increasingly out of step with the contemporary world of finance.”
The report also highlighted that Montag settled an unusually large variety of “credible allegations of misconduct or of working in a toxic environment… a few of those complaints alleged gender-based harassment or discrimination.”
That’s a clumsy fit for Goldman, in keeping with some female bankers, on condition that Goldman this spring paid $215 million to settle accusations of rampant sex harassment and discrimination on the firm.
A source near Goldman said talks for 66-year-old Montag to hitch the board have been occurring for nearly a 12 months.
He’s being picked for his serious risk-management bona fides after longtime board member Mark Winkelman retired this spring, in keeping with the source.
On Thursday, the board nominated Montag as an independent director, in keeping with a filing. The appointment is subject to full board approval.
The move comes as a surprise to some insiders, with one saying he initially took the report as a “trial balloon” since it appeared like such a nasty idea.
Lots of Montag’s former colleagues are also upset that Goldman is embracing the aggressive executive.
While he worked at Goldman Sachs for greater than 20 years, Montag left on a sour note when he exited the firm in 2008.
“He left in a huff — he thought he should’ve been promoted,” one source told On The Money.
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What’s more, after his departure Montag tried to poach many Goldman employees — a proven fact that didn’t ingratiate him to Goldman’s then-leadership.
One other source identified that Montag appears to have engendered loyalty amongst his employees at Goldman.
Otherwise, they wouldn’t have followed him, the source noted.
But when Montag has deep knowledge of banks, trading, and risk management, sources say there are many others who even have that expertise — and without the luggage.
While many speculate that the Montag appointment is evidence of Solomon’s insecurity, others say the CEO who moonlights as DJ D-Sol, believes the whole lot will calm down.
One source said he believes people will move on and that he’s confident he can hang onto his perch.
A spokesperson for Goldman declined to comment.
But skeptical observers don’t expect the drumbeat of resentment and frustration to be silenced anytime soon as top talent exits, firings persist and bonuses disappoint.
Glum dealmakers noted that Goldman was overlooked of working on the Cava IPO – the primary major public offering this 12 months.
Goldman also faces multiple investigations into its disastrous handling of advising Silicon Valley Bank on a capital raise.
And last week, CNBC reported that Goldman is prone to take a drastic writedown on its $2.2 billion acquisition of Greensky.
“In the event that they have a blowout quarter, perhaps they will silence individuals with that,” one source mused.
