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In finance, there's no bigger race to win than becoming a CEO on Wall Street. Beyond the tens of millions of dollars that you stand to make, these are very, very rare seats. You know, there's only a handful of them in the world to run a big global investment bank. It's a seat that matters. That's CFT's U.S. banking editor, Joshua Franklin.
He says that scoring one of these jobs is a tough competition. The likes of JPMorgan Chase, Morgan Stanley, Bank of America, Citigroup, they're labeled global systemically important banks. These are pretty hard-charging places, and that can make it pretty competitive.
Josh, would you say that it's more of a sprint or a marathon? I'd say these are very grueling marathons that people dedicate years and sometimes decades of their lives to winning. Look at the situation at Morgan Stanley, J.P. Morgan, where you always have a horse race or a list of candidates that are vying to be the next CEO. But for now, one race seems to be called off at another bank.
Goldman Sachs. In fact, it looks as if the bank's chief executive and the board have already selected the next CEO years before this will actually take place. It's really raised eyebrows on Wall Street. And it really does just underscore the extent to which David Solomon, who's the current CEO, has recovered his position following a pretty challenging period a couple of years ago when he was under a lot of criticism, not
not least from his own employees. You know, the language that was used by one person at Goldman at the time talking about the situation to me, they described it as a rebellion against David. And now it's pretty clear at this point that the rebellion has failed. And the fact that he has been able to basically handpick John Waldron, who's also one of his best friends in the industry, shows just how much he's really reasserted his control over Goldman. I'm Michaela Tendera from the Financial Times.
Today on Behind the Money, how CEO David Solomon got back into Goldman Sachs' good graces after surviving a near rebellion. And if he can pull off installing his hand-picked successor, what will that mean for his legacy at the bank? Before we can talk about David Solomon's potential successor, John Waldron, we need to talk about Solomon and his own journey as CEO of Goldman Sachs.
He becomes CEO in 2018. And when he does, he quickly lays out a strong vision for the bank. One was to diversify its business to make it more stable and durable. So Goldman historically made its money from investment banking and trading, which can be very lucrative, but are also pretty unpredictable businesses, ebb and flow with what clients are doing, with what's going on in the markets. And so they wanted to try to get something that was a little bit more stable. I'd call it like
you know, project durability. One way that Solomon tries to pursue this project durability is by doubling down on a new business, consumer banking. That is, banking for regular people, not the super rich. And this was basically the idea that Goldman Sachs would build a digital retail bank called Marcus that would compete with the likes of Chase and Bank of America.
And long story short... It was very expensive to get off the ground. It was controversial internally. This blows up in Solomon's face. It ended up losing Goldman several billion dollars. And it got to the point where investors did not like it. Employees hated it. And it really built into this big backlash against David starting in about 2022 that spilled over into 2023.
That backlash reaches its peak when Goldman discloses that this consumer banking project has suffered some heavy losses, something to the tune of $3 billion in the last few years. Now, this all happens in stark contrast to another area of the bank. Crucially, the traders at Goldman in 2022 had had just a gangbusters year.
There was a lot of money to be made by them in commodities trading, in equities trading, in rates trading around Russia's invasion of Ukraine. You had central banks lifting interest rates. So a lot of market volatility. And they had just a stellar year. And a lot of these traders who felt, you know, my business is up 20, 30, 50 percent, they
my bonus should be up 20, 30, 50%. But what Solomon ends up having to do is take a lot of those profits that were earned by the traders and instead of using that money to pay them, use that money to cover the losses from the consumer business. So you have people who felt like they had a career best year, a better year than they'll probably ever have, and they definitely didn't get paid what they thought they deserved to be paid.
So that probably leads to a lot of unhappy traders. Yes. And obviously, on one side, you can look at this and think, world's smallest violin playing for multimillionaire traders on Wall Street, not getting enough from their bonuses. But this stuff does matter if you're the CEO of Goldman Sachs. And the traders were already quite wary of Solomon. He was a career investment banker, never really worked in trading. And
Solomon hasn't only promoted investment bankers into senior positions since he's been running Goldman Sachs, but he's certainly promoted a lot of investment bankers and traders have noticed that. And this just kind of took things to a whole new level and things spilled out in a pretty public way and especially into the media. You had just a lot of damaging stories about David's running of Goldman Sachs. So there are bad headlines left and right.
The traitors are not happy with Solomon, and so they take it to the press to badmouth his leadership.
Even here at the FT, the editorial board has something to say about Solomon's leadership back in 2023. Let me read you a critique, though. Sure. Did you read the Financial Times this morning? I did not read the Financial Times. OK, this is the editorial board op-ed. I'm sorry, yesterday. You read this yesterday. You know what I'm about to say probably then. So Andrew Osorkin from CNBC was interviewing David Solomon in February of 2023, and
This was during the most challenging period of David's time running Goldman Group.
This is the FT. The bank whose dominance is the Goldman Sachs but was once so assured they gained notoriety as the vampire squid is now more of a damp squid, they write. Sorkin's referencing a nickname Goldman Sachs earned after the 2008 financial crisis, the vampire squid. Solomon did not err in his judgment that Goldman needed to diversify. The question is the wisdom of the mix he chose and its bungled implementation.
I'm curious what you think of that and also if there's a lesson in all of this. Sorkin is, I think, encapsulating how people were feeling about the work that David had done, which was he bungled the execution of it. Well, I don't, I mean, I don't like that. But at the same point, that's, I would say that's an opinion from one source.
I look to our clients and I listen to our clients. And the feedback from our clients about the way we serve them continues to be excellent. So I think that really showed just the pressure that David was under to show that he could really right this ship and get things back on track. So things are looking pretty bad for Solomon throughout most of 2023. He's facing a rebellion inside his own company.
And he even has to quit his side gig DJing. He performed at some pretty high-profile gigs under the stage name DJ Diesel, Lollapalooza, quite famously. A few years ago, he performed at a music festival in Belgium, I believe.
And what started as kind of like a kind of quirky detail about him in the end became this big distraction. And people felt like it wasn't an appropriate thing for the CEO of Goldman Sachs to be doing, especially at a time when the bank was profitable but losing money in this consumer business that David had been a big advocate for.
But then, just as things are looking their worst, some help comes in the form of a statement from a board member in September 2023. The lead independent director for Goldman Sachs came out and pretty publicly supported David and said basically that Solomon is not going anywhere anytime soon. And that really did seem to quell the mutiny against Solomon because people internally realized, OK, if the board is going to back him, ultimately, the guy is probably here to stay.
So that combined with dramatically scaling back the consumer business really helped get people back on side for David and Steady the Ship, really kind of sending the signal that he was going to focus on Goldman's historical strengths rather than trying to expand and spend a lot of money going into pretty untested businesses for Goldman. So jumping ahead to the present, you know,
status check on Goldman Sachs. How are things right now? Things are pretty good right now. They were a little bit better a few months ago when everyone was
Everyone on Wall Street was excited for this kind of deregulation, pro-dealmaking environment that they were expecting from the Trump administration. So the tariff war has taken a little bit of the shine off that. But Goldman's share price in the not-too-distant past was at a record high. The trading business in these volatile markets is doing very well for Goldman. So Solomon's recovered to a very strong position, and the view is –
He's not focused on survival for his position. He's now really thinking several years ahead for who's going to come after him. And increasingly what we've noticed starting from this year is that more and more indications are pointing that the person who will follow Solomon as CEO of Goldman Sachs is a guy called John Waldron. Now, to be clear, Goldman Sachs hasn't officially announced anything.
But Josh's reporting connected the dots. Perhaps the most obvious factor, Waldron is currently the bank's president and COO. That makes him the de facto number two. But plenty of number twos have come and gone at Goldman Sachs without ever clinching that CEO job.
So this time with John Waldron, Josh told me, seems different. Over the first few months of 2025, we've seen John Waldron get a number of perks at Goldman Sachs. So he was awarded an $80 million retention bonus that would keep him at the bank for another five years. He was given a salary increase that puts him above a lot of other people.
CEOs in corporate America. He was given a seat on Goldman's board of directors and a nice cherry on top, he was given expanded access to Goldman's private jet.
The question then is, okay, why is Waldron getting all this now? And certainly our reporting has been that the catalyst for this was talks that Waldron had late last year with Apollo Global Management, which is an alternative asset manager, that was dangling some pretty...
eye-watering numbers to Waldron about a potential job there. How big? So we're talking several hundred million dollars over a few years and potentially rising up to $500 million. Wow.
That's a lot more than you can make at Goldman Sachs. Yes, that's a lot more than you can even make at Goldman Sachs. And so our understanding is Waldron was having these talks with Apollo and ultimately he decided to stay at Goldman and Goldman then also has now taken steps to make sure that they're kind of locking Waldron down for the foreseeable future.
So Waldron rebuffs this interest from Apollo. That, plus the perks Goldman gives him, all but confirms to Josh's sources that the board and David Solomon want Waldron to be the next CEO. Now, I wanted to know a little bit more about who John Waldron is.
And Josh tells me he's pretty much Solomon's right hand and always has been. The one almost constant in John Waldron's career is David Solomon. So Waldron joins Bear Stearns in 1992.
David Solomon is already there in a pretty senior position. They meet and that relationship is the most important relationship that John Waldron has had in his entire career.
And David Solomon leaves Bear Stearns in 1999 to join Goldman Sachs. And then it's David Solomon a year later in 2000 who recruits John Waldron to move to Goldman Sachs. So they've really worked together for almost the entirety of Waldron's career. And people who have worked with them describe their relationship as almost fraternal. They're like brothers, sisters.
As Goldman's current number one and two, these brothers have had their fair share of successes,
And that could tell us something about what a Waldron-led Goldman Sachs could look like. I think they would point to their growth in market share in trading and investment banking. People talk a lot about the programs and the efforts from Solomon and Waldron to get the different parts of Goldman Sachs to work better together. And that's had a tangible benefit in market share in these businesses.
They've pushed into asset and wealth management, which people inside Goldman Sachs think that that's going to be the next big growth driver for Goldman Sachs in the years ahead. They've become more shareholder friendly. So I think there's been wins that people have liked. But Josh says they've had failures too. The big misses from them have been...
Certainly, the consumer one stands out and the losses there and just the turmoil that that caused internally. There's also during their tenure, Goldman Sachs paid a pretty significant several billion dollar fine and entered a guilty plea for their role in the 1MDB scandal, which was a Malaysian state investment fund where money was improperly used.
And even though Goldman Sachs said that there was no indication that David and John were actively involved in that, it was still a reputational issue for Goldman Sachs. And so it hasn't been a perfect tenure for Solomon and Waldron. But I think certainly the two of them can point to some key wins despite a few setbacks. Even after having such a bumpy year within that. Yes, especially with everything that happened with the consumer business.
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Do they think he's up for the job? So I've spoken to more than 20 people who have worked with Waldron over the years, who have been clients of his over the years, and other people who have just had dealings with him. And the picture that emerges of Waldron is someone who's broadly pretty well-liked, known for being a very, very hard worker, known for being someone who wants to build bridges internally between different parts of the bank.
Now, we can't ignore the fact that Waldron has essentially never worked without David Solomon nearby, almost like his shadow. But Waldron said that he sees himself differently.
Here he is speaking on a Goldman Sachs podcast a few years ago. David's an extraordinary professional. I've worked with him for most of my career. I've learned a lot from him. He's been a mentor to me, and so I really have great respect for what he brings to the table. We are different. We're pretty complementary in the way we operate. I think we see things similarly in many respects, but we have different talents and skills we bring to the table, so we do complement each other. Hmm.
So Josh, what's your take on this? Are they a compliment or is he a carbon copy? He's not a carbon copy of Solomon. I think Waldron's been the good cop to David Solomon's bad cop running Goldman Sachs. David is often seen as the one who's a little bit more distant and tough in terms of decision making. And Waldron is the one who has the softer touch about how he manages people.
And you see that with their relationship with Goldman's partners. And there's about 400 of them, and they carry a lot of importance internally. And the partners were furious at David, a lot of them anyway, in 2023 with the whole mess with consumer and what was happening, and they were dealing with a lot of unhappy employees underneath them. And what you saw during that time, though, was even as they were unhappy with Solomon, Waldron...
at least according to my reporting, really did manage to keep their trust and was able to juggle being both a close ally of Solomon and also retain the trust of the partners. So I think that shows you their differences in style and perception internally. I think the question you have for Waldron is, is that style feasible when you're the person in charge of everything? Yeah.
Yeah, if you don't have the bad cop to play off of, a lot of that becomes trickier to manage. Yeah, exactly.
And I think another layer of just difference between John Waldron and David Solomon is that John Waldron is very much known as a bit of a political animal in a way that David Solomon just isn't. Waldron is a Republican. He's known to have pretty close ties with a number of Republican politicians. And there's regular talk inside Goldman Sachs that Waldron does have political ambitions one day.
So maybe one day we'll see Waldron in the cabinet or something like that. But before we get ahead of ourselves, let's focus on Waldron as Goldman Sachs CEO.
What are some criticisms or concerns that you've heard? I think the knocks that you hear on John Waldron are that he can be too much of a pleaser for some people's liking. He wants to keep people happy, which is a good thing. But also sometimes when you're running these places, you do have to make tough decisions that will make at least some people unhappy. And then I think the broader question that people have is just David Solomon has been such a central figure in John's career.
what does John Waldron without David Solomon look like? And I quote one person who has worked with Waldron and Solomon who's told me that the world has never seen a John without David's input, and none of us know what that is. And so I think that's the central question for John Waldron as a leader. And then maybe more broadly, a disadvantage of not specifically on John Waldron, but...
Just the fact that someone seems to have been tapped for CEO. How does that impact Goldman? Yeah. So I think that then there's this ongoing question of other top leaders at Goldman Sachs. Do they have ambitions for something more than what they're currently doing? And Wall Street normally is a pretty ambitious place. Normally the answer to that question is yes.
And so a way to keep people happy is to make them feel like they're at least in contention for bigger jobs. And once you get to pretty rarefied air at the top of these places, the only real job up is either president or CEO. And so there's the question about how Goldman keeps all these different top executives happy if they feel like the CEO job is ultimately always going to be out of reach for them now. And I think it's something you've already been seeing, you know,
David Solomon and John Waldron have been in their positions, you've seen a number of other top executives of Goldman Sachs already leave. Other executives who potentially may have fancied themselves to be CEO of Goldman Sachs one day. So the question of whether or not that continues to happen. And why is that bad for the bank as on the whole if people are leaving like that? It wouldn't be great. Wouldn't be great because ultimately,
the lifeblood of their business is talent and client relationships. And those are hard to replace.
So Josh, what is the timing for all of this? I mean, when will John Waldron become the next CEO of Goldman Sachs? So barring any unforeseen circumstances, no one expects any change to be imminent. I think David Solomon will want to stay at Goldman Sachs for the next five years in some capacity because he stands to make an $80 million retention bonus if he's around for that time. But I think some people wonder whether or not
Because David would get that money regardless of any position that he's in at Goldman, he needn't continue to be CEO. Potentially, maybe he hands over the reins to John Waldron in the next few years. David Solomon moves upstairs and just stays around in an executive chairman function until the end of those five years. So there's a few different permutations. But certainly, I think there's a feeling that no change is going to happen in the next two or three years. Yeah.
So by Waldron potentially taking over, I mean, it seems like this would effectively be a continuation of David Solomon's strategy. So what would that look like for Goldman Sachs? Just, you know, if we see that strategy continuing for another several years? So I think you'll see them continue to try to grow more and more in asset and wealth management. And I think that's the piece of the Goldman pie that they're going to want to continue to grow. And I think there's a lot of
secular growth in that private capital world in particular that Goldman is going to want to try to be a part of. And so I think that's where strategically a lot of the big focus is going to be. And then also staying competitive on investment banking and trading. Yeah.
What does this selection of Waldron say about David Solomon's legacy at Goldman? So if John Waldron is the next CEO of Goldman Sachs, I think that is ultimately a victory for and vindication for David Solomon running Goldman Sachs.
He would not only have run Goldman Sachs for one generation, he's also been responsible for grooming the leader of the next generation for Goldman Sachs. The question then becomes, will Waldron be the leader that Goldman needs? I'd like to take a moment to honor a colleague. Recently, one of our show's audio engineers, Joe Salcedo, passed away suddenly. Joe was a valued member of not only our team here at Behind the Money, but the wider FT Audio team as well.
He brought a positive attitude and meticulous care to everything he worked on for our show. And we will miss him very much. Behind the Money is hosted by me, Michaela Tendera. It's produced by me, Safiya Ahmed, and Katya Kamkova. Sound design and mixing by Sam Giovinko. Original music is by Hannes Brown. Topher Forges is our executive producer. Cheryl Brumley is the global head of audio.
Thanks for listening. See you next week.
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