Tue, 16 Oct 2018

Goldman Sachs CEO prepares to step down, Solomon to succeed

By Sheetal Sukhija, Washington State News
13 Mar 2018, 05:31 GMT+10

NEW YORK, U.S. - Days after Wall Street Journal reported that Goldman Sachs CEO Lloyd Blankfein is preparing to step down, the Wall Street giant is now said to have picked Co-President David Solomon to succeed Blankfein.

Lloyd Blankfein, who is one of the longest-serving Wall Street banking chiefs, is said to be preparing to step down, possibly later this year.

The report earlier the week sparked questions on who would replace Blankfein, who was expected to step down from his role around the lender’s 150th anniversary in 2019.

With Goldman Sachs co-chief operating officer Harvey Schwartz set to retire from the Wall Street giant next month, many suggested this clears the path for David Solomon to eventually become the next chief executive of the investment bank.

Schwartz and Solomon jointly hold the positions of co-chief operating officer and president and both had been considered likely successors to Blankfein, who would end his 12-year stint at the helm.

When the Wall Street Journal first published the story on Friday, Blankfein took to Twitter and said the announcement was like “Huck Finn listening to his own eulogy.”

Goldman shares on the day jumped, signalling that investors might not be sorry to see him go.  

On Monday, Goldman Sachs officially announced that the Group Co-President and former CFO Harvey Schwartz will retire April 20. 

However, people familiar with the inner decision making revealed that Goldman Sachs Group Inc.'s board of directors had picked Co-President David Solomon to succeed Blankfein when he steps down, likely in the next couple years.

The source said that the board had chosen 56-year-old Solomon, over fellow Co-President Harvey Schwartz, at a meeting in February. 

Adding that the firm issued a press release announcing Schwartz's retirement only after the decision on Solomon was communicated to the Wall Street firm's senior managers at a meeting on Monday.

Solomon, who helped to build and expand Goldman's debt-underwriting business, has a roster of corporate CEOs as clients and has, over the past two years, worked closely with Goldman's trading division.

Blankfein meanwhile said in the statement, "Harvey has been a mentor to many, and his influence has made an indelible impact on generations of professionals at Goldman Sachs. I look forward to continuing to work closely with David in building our franchise around the world, serving our expanding client base and delivering strong returns for our shareholders."

The Wall Street powerhouse is pushing to overhaul its business strategy after 2017 became one of its worst years since the financial crisis a decade ago. 

The firm turned in a worst-in-class performance last year in the highly profitable business of trading stocks and bonds.

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