Incoming CEO David Solomon is making leadership changes at Goldman Sachs.
Incoming CEO David Solomon is making leadership changes at Goldman Sachs. © Bloomberg

Goldman Sachs’ veteran chief executive Lloyd Blankfein is stepping down and will be replaced by David Solomon, the investment banker who has been CEO-in-waiting since his promotion to president in March.

The appointment of Mr Solomon is expected to be announced alongside Goldman’s second-quarter earnings on Tuesday morning, according to a person briefed on the plans.

The person would not say when Mr Blankfein will step down, or if he will continue as chairman of the bank.

But the move — first reported by the New York Times — marks an end to Mr Blankfein’s 12-year run in the top job and leaves JPMorgan chief executive Jamie Dimon as the only Wall Street boss still standing on the eve of the ten year anniversary of the Lehman Brothers’ crash.

Mr Solomon joined Goldman Sachs from Bear Stearns back in 1999, coming in at the coveted ‘partner’ level and swiftly rising through the ranks of its financing group to become co-head of investment banking by July 2006.

The banker, who produces dance music under the DJ D-Sol handle, has been linked with the top job since Gary Cohn left Goldman for the Trump administration, but had to first see off competition from securities boss Harvey Schwartz. This was achieved when he was named sole chief operating officer and president in March.

FILE PHOTO: Goldman Sachs Co-President and Co-Chief Operating Officer David Solomon plays disc jockey at a lounge called Libation in New York City, U.S. April 7, 2018. REUTERS/Jennifer Ablan/File Photo
Goldman Sachs co-president and co-chief operating officer David Solomon plays disc jockey at a lounge called Libation in New York © Reuters

Mr Solomon’s approach to the fixed income division will be closely watched by analysts and investors, given that the unit has under-performed rivals and Goldman has promised improvements. Mr Solomon is known as a straight talker and not afraid to offend colleagues, but he is not expected to plot a radically different course to Mr Blankfein, who he is very close to.

Famed for the loyalty that he both demonstrated and inspired, Mr Blankfein spent the first few months of his career as a commodities trader at J Aron & Co, which was bought by Goldman Sachs in1981.

The Harvard Law School graduate was promoted to co-head of Goldmans’ currencies and commodities division by 1994, working his way up to president by January 2004 and chief executive and chairman by June 2006.

His tenure included the fraught years of the financial crisis, when Goldman Sachs became a bank holding company and had to fundamentally overhaul some of its old businesses, like proprietary trading and fixed income.

Mr Blankfein won plaudits for making “fortress Goldman” an early winner in the financial crisis, but drew criticism for his outspoken nature, including declaring his bankers to be “doing God’s work” in a 2009 interview with the Sunday Times.

Guy Moszkowski, analyst at Autonomous, said one of Mr Blankfein’s greatest achievements was “leading the firm effectively through the industry collapse of 2008 in arguably far, far better shape than most of the peer group”.

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“They (Goldman Sachs) also managed to find a way to keep one of their greatest profit engines – the private-equity and special-situations businesses, both housed in the Investing & Lending unit – alive and thriving despite the threat posed by the Volcker Rule,” he added.

More recently, Goldman Sachs’ fixed income business has under performed rivals, and its market value briefly dipped below rival Morgan Stanley’s. Goldman has also made a foray into consumer banking, with the 2016 launch of online bank Marcus.


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