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Solomon’s curtain call

Financial District London
By Jonathan Winston
02 November 2023
Financial & Professional Services

Last month, the Financial Times reported that Goldman Sachs Premier, David Solomon, had been under increasing pressure from colleagues to hang up his mixing decks, amid reports of uneasy board members expressing concern that it was distracting him from his day job.

Scrutiny over his pastime began in 2018, as Lloyd Blankfein, responsible for steering the bank during the fall out of the Global Financial Crisis, passed the mantel of responsibility over to Solomon as CEO.

Having made his debut in 2015, entertaining crowds at the likes of Tomorrowland and shows in the Hamptons, his side hustle is clearly no obscure PR front. Although his exit from the stage does exemplify the personal cost involved in reaching the top of the Greasy Pole.

Yet, having a persona outside of work is not illegal. Mark Zuckerberg has his Brazilian Jiu-Jitsu and Jamie Dimon to an arguable extent demonstrates statesman-like qualities when giving his two cents on US domestic issues and international affairs, so why can’t Solomon have his alter ego?

Simply put, when your business starts to underperform against expectations, distractions become relevant.  Just a few weeks ago, Goldman Sachs reported a 36% drop in Q3 profits, the bank’s eighth consecutive quarter of falling earnings. True, that the lack of deal activity would have had an impact on the bank unlike peers such as JP Morgan Chase or Morgan Stanley, Goldman lacks the same diversification in other businesses to compensate for a period of weaker performance in its core investment banking and trading activities.

Solomon is also faced with an existential problem. Navigating the 154-year-old institution through the post 2008 landscape which has seen investment banking become less influential, less dynamic, and more regulated; an environment that has now seen the likes of Private Equity behemoths swell in size such as Blackstone, in turn overshadow Goldman’s legacy status as ‘being the smartest guys in the room’.

When you compare the corporate landscape of this century and last, it is a rather different place (think Elon Musk on a certain podcast). CEOs are in the press increasingly and with that, the public does get a varying glimmer into their lives, often at times showing us that there is a genuine person under the hood (for better or worse). Although sadly, there is a cost involved in this.

Considering the road ahead and the numerous challenges Solomon must overcome, optically speaking, the bank’s public image could benefit less from his extracurricular activities.

When prompted for a response, Goldman’s Head of Communications Tony Fratto proclaimed that ‘David hadn’t publicly DJed an event in over a year’ and that the distraction was not the music but the media attention that revolved around it.

Whether the CEO of Goldman Sachs can DJ at an event and not garner media attention is a different question for another time, although it does beg the question on how far a board can tolerate the antics of a CEO before eyebrows are raised.