John Waldron, chief operating officer of Goldman Sachs Group Inc., and Goldman Sachs Chairman and CEO David Solomon.
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Goldman Sachs is now at the top of Wall Street, advising on more than $1 trillion in merger transactions and generating more than $12 billion in equity revenue in the first six months of this year.
The note makes it all the more surprising that Goldman’s board has reportedly discussed replacing CEO David Solomon, 64, with president John Waldron, 57, early next year.
A succession plan, which would elevate Solomon to chief executive, could be voted on by the bank’s board in the coming months, The Wall Street Journal reported late Monday.
The transition will be one of the “smoother and more deliberate” handovers of leadership seen on Wall Street, Wells Fargo banking analyst Mike Mayo wrote Friday.
But there are major risks facing Goldman: Suleman may not be ready to give up his seat, and Waldron may not be willing to wait indefinitely.
Solomon has got Goldman back on track after an ill-fated foray into consumer banking earlier in his tenure. With the help of the rebound of bids powered by the Trump administration and the boom of Artificial Intelligence, Goldman once again has a clean story for investors: It is a pure investment bank-play top.
“It’s very difficult for someone like that to decide when they’re going to retire,” said retired University of Delaware law professor Charles Elson. “Being 65 today is like 55 30 years ago.”
Elson also noted that Solomon is the chairman of Goldman’s board and has great influence over the body, making it difficult to force him out.
Goldman spokesman Tony Fratto said there is “no definitive timeline for succession” at the bank. Bank boards often discuss succession planning in the short, medium and longer term.
‘There’s always tension’
Another expert on CEO succession, the Yale School of Management’s Jeffrey Sonnenfeld, said it would be bad governance if Goldman’s board tried to “oust an accomplished CEO like David Solomon.”
Under Solomon, who took over as CEO in 2018, Goldman shares rose more than 300%, the second-best performance of KBW Bank Indexaccording to Mayo. only JPMorgan Chase CEO Jamie Dimon, who has led his company for nearly 21 years, has done better.
That leaves Goldman in something of a bind: Although Solomon is planning to leave in the year, he has little push to speak. Doing so would make him a lame duck with little leverage in the bank, according to Elson.
But if Solomon decides he wants to stay on as CEO amid the AI boom he believes is in its early stages, Waldron could tire of waiting for the crown.
After all, Waldron, Goldman’s president and chief operating officer, has reportedly been in discussions about a leadership role at the alternative asset manager. Apollo and Carlyle.
To keep him, Goldman gave Waldron an $80 million retention package that lasts until 2030. Even then, deep-pocketed suitors could play for Waldron, Elson said.
“There’s always tension on a set like that,” Elson said. “It’s like Prince Charles waiting for his mother to die. You can’t set your own priorities, because someone else is in charge.”