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The next Goldman CEO could be a banker who moonlights as a DJ
[NEW YORK] As bake-offs go it was pretty unusual: A part-time disc jockey and a karate black belt vying to be the next leader of arguably the world's most influential bank.
On Monday, Goldman Sachs picked the DJ.
David M Solomon, 56, a longtime investment banker, has been anointed as the sole heir apparent to Goldman's chief executive, Lloyd C Blankfein. The decision was signaled Monday with the abrupt retirement of Solomon's lone rival for the job, Harvey M Schwartz, 54.
A decade removed from a global financial crisis, Goldman remains a potent symbol of Wall Street's enduring power, and its chief executive perhaps the banking industry's most prominent spokesman.
Blankfein has led the firm for nearly a dozen years since his predecessor, Henry M Paulson Jr, departed to be the Treasury secretary under President George W Bush. Blankfein, 63, has joked that he intends to die at his desk, but he has signaled to people inside Goldman that he may leave as chief executive as early as this year, according to two people familiar with his thinking.
The possibility that Blankfein could soon step away intensified the competition between Solomon and Schwartz, who twice pressed the board for an answer in recent months.
In February, Goldman's board met at its headquarters and evaluated the two candidates. Blankfein offered his view, and the directors decided Solomon was their man, according to a person who was briefed on the meeting.
The anticipated elevation of Solomon, a Goldman veteran who moonlights under the name DJ D-Sol, spinning electronic-dance music, marks a strategic shift for the bank.
The leadership transition comes at a time when Goldman's traditional business model is under siege. Its bond-trading business, once a huge component of the firm's revenue, which hit nearly US$1 billion a week in 2009, is now a shadow of its former self. The bank's limited presence in countries like Saudi Arabia and Mexico have meant Goldman has been left out of some lucrative transactions. And its belated attempts to muscle its way into businesses such as consumer lending have failed to transform the company into a real competitor of commercial banks like JPMorgan Chase and Citigroup.
Since his elevation to president was announced in late 2016, Solomon has been working to address those shortcomings. In spring 2017, he and Schwartz presented directors with a plan to generate US$5 billion a year in additional revenue starting in several years.
At the same time, Solomon strayed beyond the traditional mold of a Wall Street power broker. He demanded, for example, that Goldman's recruiters increase their hiring of women with the goal of eventually reaching total gender parity.