David Solomon in 2018.
Photo: Landon Nordeman
Even people fond of David Solomon acknowledge that his equilibrium state is what most of us would consider tense. The voice of the Goldman Sachs CEO is perpetually hoarse, as if he has permanently worn it out from screaming. “He sort of talks in a yelling voice,” says one colleague. “He’s not really yelling, but he sort of talks at you.” “When he talks, he shouts,” another banker agrees. “He always sounds like he’s shouting — always.” It’s a tendency he can’t even suppress in text: Solomon likes to MAKE NOTES ON DOCUMENTS IN ALL CAPS. The word a lot of people use about him is bully.
Solomon, 61, is bald and broad-shouldered, like a thicker and more wizened version of Mr. Clean, with eyes so squinted behind doughy features it’s hard to tell what color they are. He walks heavily, a venti iced coffee almost always in hand, as though the sport of being a banker were a physically taxing one. Several years ago, when Goldman’s board was auditioning him for promotion to CEO, the bank’s image specialists gave Solomon tips on becoming more approachable. They suggested he walk the floors more often and create opportunities for small talk — perhaps by stopping at an assistant’s desk to take a piece of candy.
“When I told him, ‘You got to stick your hand in the candy bowl,’ he just gave me this look like, Why would I do that? How is that productive?” recalls someone involved in the effort. The exercise did not succeed in endearing Solomon to the Goldman rank and file. “He would stomp around the floors in a really purposeful way, and he’d find the two or three people he knew,” the banker says. “He’d knock on their door and they would get scared. The whole thing didn’t work.”
You don’t need to be popular to be the CEO of Goldman Sachs, of course. You can even be an asshole. The only real nonnegotiable is that you be skilled at making money, so when the board tapped Solomon to lead the bank in 2018, it was widely understood that as long as earnings got fat, it didn’t matter if his bankers liked him personally.
In a way that was a little hard to detect at first — and has lately become the most-talked-about story on Wall Street — that dynamic is being put to the test. It started during COVID, when Goldman booked spectacular profits trading the pandemic markets at the same time that reports of misery among junior and senior bankers alike began to leak to the press. Executives quit Solomon’s inner circle for rival shops, younger workers complained about the 100-plus-hour weeks he expected, and everyone rolled their eyes at his newish hobby: DJ-ing huge parties under the stage name DJ D-Sol.
By the fall of 2022, Wall Street was awakening to something extraordinary: The negativity heaping on Solomon was reaching a point at which it could threaten his job, no matter the state of the business. Solomon had directed Goldman to buy a pair of private jets, and Bloomberg News reported (with a reference to Marie Antoinette) that he flew them seven times in seven weeks to places like Barbuda and the Bahamas, even as he was reprimanding workers for not logging more hours in the office. Pictures of Solomon in the DJ booth at venues from Napa Valley to Lollapalooza — looking like the “How do you do, fellow kids?” meme brought to life — embarrassed the most image-sensitive institution in finance. As the media attention began to take its toll on Solomon, he called a former colleague to ask if he would say positive things about Goldman to reporters. “Can you believe what my life has become?” Solomon said. “It’s getting exhausting.”
The single most harmful report came in November when it leaked that Solomon, who is divorced, had once boasted to a group of colleagues, “I bet I was the only one who got a blowjob last night.” Behind his back, snickering executives gave him a mortifying new nickname: BJ D-Sol. More damage came in April, when Insider reported that Solomon had flown Goldman’s planes at least 21 times to his retreat in the Bahamas. (He reimbursed the company, per policy.) Solomon was incensed. The next day, FAA records show, he registered a new Embraer Phenom jet for his personal use, disguising it under an LLC named for one of the wealthiest streets in the Hamptons, where he owns a home: Middle Lane.
Solomon dismissed his adverse coverage as “noise,” but by this June, it was deafening. The Wall Street Journal, under the headline “Goldman Sachs Is at War With Itself,” reported that Solomon’s predecessor, Lloyd Blankfein, had openly slagged him at the bank’s annual strategy conference. “God, I wish he’d spend less time on the plane and more time making money,” Blankfein said to a group of about 15 partners at a hotel bar. Soon, the New York Post claimed Goldman’s board was “starting to reevaluate” its CEO. The gargantuan profits that had protected him were slipping away. The most recent quarter saw a year-over-year decline of more than 60 percent. Senior and arguably irreplaceable talent have kept heading for the exits. In August, John Rogers, the bank’s powerful chief of staff to generations of CEOs, stepped down from his role — a sign he may be transitioning out of the firm.
Goldman veterans say that in some ways, the situation is more toxic than what the bank faced in the post-financial-crisis vampire-squid days. “This is considerably uglier for Solomon,” says a former insider. “It’s worse because it’s much more personal, and it’s all directed at him.”
In other words, at Goldman Sachs, Solomon’s sins are considered more unforgivable than contributing to (and profiting from) the near collapse of the global economy. Strategic mistakes that might have been tolerated under a more respected regime are being read as disastrous, a direct result of his personality. Solomon is blamed for mismanaging a push into new territory — banking for relatively ordinary customers — that has lost $3 billion and counting since 2020. But at Goldman, that’s frankly not a whole lot of money. (Note that in 2020 the bank agreed to pay Malaysia $3.9 billion, and the U.S. government a further $2.9 billion, to resolve a sprawling scandal in which it pleaded guilty to violating the Foreign Corrupt Practices Act.) “I’ve called for CEOs to be fired before,” says Mike Mayo, a bank analyst well known for his often antagonistic views. “If it’s warranted, I’ll speak up, but I’m not seeing it from the outside metrics.” Instead, the mutiny is best understood as backlash to Solomon’s attempt to change Goldman’s business and culture.
For most of its 154-year history, the bank was a private partnership, and even after going public in 1999, it still operated like one. It was flatter than other big banks with more decentralized power — a secretive and exclusive club of elites who were admired as the most talented operatives in the game, guaranteed to earn more money than their peers at less exalted institutions. What those partners failed to appreciate, though, was that at some point after the IPO, they didn’t own the place anymore. Shareholders controlled the voting rights, and when Goldman’s board promoted Solomon — making him the first CEO to enter the bank mid-career — he had a mandate to run the firm more transparently and more like a modern corporation. What’s baffling is that the board would give such a delicate task to a person almost universally regarded as a jerk.
“David’s not likable,” says a longtime colleague — one of the more diplomatic comments I heard in talking to more than 30 of the CEO’s current and former executives, most of them partners. “He’s a prick,” says another. “Everybody thinks and says he’s a dick,” adds a third. “He’s a tough guy with a very short fuse”; “He dehumanizes you when he talks to you.”
Morale has sunk to the lowest level in recent memory, in tandem with a sense that the bank inspires less envy among its rivals and less esteem among its fee-paying clients and governments around the world. “I don’t feel like the place is really Goldman Sachs,” says one of the former partners, whose ex-colleagues now call him daily to complain. “Goldman had that sort of magical cachet of being the smartest guys in the room, and it doesn’t feel that way anymore.”
In finance, words like cachet can be euphemisms for compensation. “If you are a Master of the Universe,” one former executive told me, “the only proof that you are a Master of the Universe is how much money you get paid.” And last year, pay sagged around the firm. The bank dispensed $2.5 billion less in compensation and benefits than it had the year before, even though the head count had gone up 10 percent. “They’re still the highest-paid people on Wall Street — that stuff’s true — but it doesn’t feel good to have a down year,” says Tony Fratto, the bank’s spokesperson. “These are people who are used to their comp going up every year. This is a place where people get upset about this.”
The rancor leaves Solomon in a precarious state. Both outcomes seem impossible: that he could continue to lead a team that so thoroughly despises him, or that what is supposedly the most ruthless outfit in capitalism would really oust its boss over hurt feelings.
“If you try and change the company too fast and too bluntly, it’s gonna break or you’re gonna break,” says an executive who left the bank recently. “Organ rejection.”
Speaking to employees at Goldman Sachs headquarters in September 2018.
Photo: Landon Nordeman
Goldman Sachs has already gotten rid of David Solomon twice. A try-hard public-school kid from Scarsdale, he applied to the bank soon after graduating from college and was turned down. The second time he sought a job there, he made it all the way to a final interview with a senior partner. As Solomon recounted dryly in a recent speech, “He looked at me. He looked at my résumé. And he looked back up at me and he said, ‘David, let’s face it. You’re really not Goldman Sachs material.’ Which, if true, is really bad for Goldman Sachs today.”
Solomon went to work for firms like Bear Stearns and Drexel Burnham Lambert instead and distinguished himself in Las Vegas dealmaking, impressing billionaires like Sheldon Adelson and, eventually, Goldman Sachs. In 1999, the bank hired him as a partner — a side-door entry that Solomon’s longer-tenured colleagues never let him forget. After he had been at Goldman for a decade, Solomon turned to Gregg Lemkau, who had spent his whole career on the inside, and asked what he had to do to stop being called a “lateral.”
“If you wanted, you could start over as an analyst,” Lemkau told him. “And then people wouldn’t call you that.”
Although Solomon didn’t experience Goldman in its pre-IPO partnership days, he rose to lead the investment-banking division, where his rigorous and demanding style kept his team at the top of the industry. By some accounts, it had never been better run. “I can’t think of
a more horrible thing to say about a person, but he’s just kind of an executioner,” says a former executive.
Success created cover for Solomon’s rougher qualities. He had a reputation for being “very punitive, very sharp-tongued, very hotheaded,” says Jamie Fiore Higgins, a former managing director and the author of a 2022 memoir, Bully Market: My Story of Money and Misogyny at Goldman Sachs. Solomon could also be sensitive about his image. After a reporter described him as “paunchy” in a 2011 article, Solomon confronted her. Grabbing the fleshy inches covering his midsection, he demanded, “Do you think this is a paunch?”
Solomon was known to call the partners he disagreed with “idiots” and even curse them out. His colleagues didn’t mind the language so much as how he made them feel: stupid, as if the only way they could possibly stand behind their opinion was if they were dunces who didn’t deserve to be at Goldman Sachs. “He would say something to the effect of, ‘Well, you’re just absolutely wrong about that,’ and he would just shut the debate,” says a former partner. A classic withering Solomon conversation-stopper was “How could you possibly think that?”
At the same time Solomon was brawling with senior staff, he was cultivating a reputation as a relatively enlightened leader, giving junior bankers Saturdays off and promoting women into more lucrative positions. When the bank’s president, Gary Cohn, left in 2016 to join the Trump administration, Solomon was promoted into his role. He was also named co-chief operating officer alongside Harvey Schwartz, creating a two-man race to one day succeed Blankfein as CEO. Schwartz was also a lateral hire, but he had joined the firm earlier than Solomon, come up through the same trading division as Blankfein, and was considered the front-runner.
Solomon worked to tone himself down a bit. “I think I’ve benefited at the firm in my leadership style for being direct and candid but fair,” he said on a podcast recently. “I think about that a lot. And people have said that to me: ‘You know, sometimes you’re very direct, you’re very candid, but you’re fair.’ And so as long as they say, ‘But you’re fair,’ I feel like I have the balance right.”
While Solomon was competing for the CEO job, his marriage was falling apart. At 27, he had married an Ogilvy & Mather PR executive named Mary Coffey, and the couple raised two daughters. Solomon’s cuff links bore photos of the three. Accompanying David to a Rangers game with clients once, Mary turned to one of his colleagues and said, “I’m doing four of these this week.” “I think she might have gotten bored of life as the wife of the guy trying to run Goldman Sachs,” the colleague says. “It was as much of a job for her, and I’m not sure she liked that job.” Before their divorce was finalized, they went through a public ordeal. In January 2018, the couple’s assistant, Nicolas DeMeyer, was arrested for stealing $1.2 million worth of wine from the Solomons’ collection. DeMeyer’s mother offered to pay Solomon restitution, but he turned her down. Meaning to sound reassuring but coming off as condescending, he told her, “Don’t worry about it — I’m not going to give up eating.” Nicolas DeMeyer died by suicide, jumping out a window of the Carlyle Hotel, on the same afternoon he was expected in court.
Inside Goldman, Solomon’s balancing act was working. With profits down from subprime-era highs, the board was under pressure to modernize the place. The next CEO would need to pare back some of its theatrical secretiveness and expand beyond trading and investment banking into less glamorous areas like asset management and credit cards. Solomon prevailed over Schwartz, pitching a more efficient and accountable vision of Goldman that included checks on spending accounts and business travel as well as quotas to recruit more women to each analyst class. In the summer of 2018, the bank announced that Solomon would replace Blankfein as CEO.
Solomon, who had been quietly developing his DJ skills under the tutelage of the New York producer Liquid Todd, decided to perform in Montauk a month before taking office, spinning at Gurney’s for an audience of millennials paying thousands of dollars to sip rosé in cabanas. The Times had outed Solomon’s sideline a year earlier, and Blankfein was still deciding whether it was grounds for amusement or concern. “DJ-ing is not a social hobby,” Blankfein told a number of confidants.
DJ-ing at Lollapalooza in the summer of 2022.
Photo: Shea Flynn
The Solomon era at Goldman Sachs began with outward signs that he might rule as a kinder and maybe even “woker” boss. He relaxed the dress code, allowing Goldmanites to sometimes wear jeans; scheduled the bank’s first “Investor Day,” at which shareholders and analysts could interview senior executives, unimaginable in the partnership era; and decreed that the bank would no longer arrange IPOs for companies with boards that were all male or all white. The people who actually worked for Solomon, though, were skeptical that any amount of DJ-ing could help him evolve. “Everyone in banking laughs about the D-Sol thing because they were all terrified of him for the last many, many, many years,” says a former senior trader.
At the same time, Solomon was stacking his C-suite with close allies, including John Waldron as chief operating officer and Stephanie Cohen as chief strategy officer, which insulated him from a degree of criticism. Solomon has acknowledged feeling a shift. “As a banker, I always would talk to CEOs and they’d talk about sometimes the loneliness, the isolation,” he said recently on another podcast. “But I was really surprised, when I actually got into the seat, how real it is.” He got little more than a year on the job before COVID, and during lockdown, he seemed conspicuously lonely. His kids were on the West Coast, border restrictions kept him from visiting his girlfriend in Canada, and his vacation home in Baker’s Bay in the Bahamas had just been destroyed in a hurricane. Solomon was mostly by himself in his penthouse apartment on Wooster Street. While the majority of his colleagues locked down or fled the city, he continued to take a car the mile or so to Goldman’s headquarters on West Street. “I just think he didn’t have anything to do,” says an ex-partner who worked closely with him.
Solomon was among the CEOs most forcefully advocating a quick return to the office. He relished telling a story about lunching in the Hamptons one summer Friday when one of his junior bankers, sitting at a table with other young Goldmanites, walked up to make an introduction. To Solomon, the breach of protocol embodied everything that was wrong with remote work: If the analysts were comfortable breathing one another’s air in East Hampton, they could do so at Goldman headquarters. In July 2020, Solomon directed his team to draft memos ordering workers back to their desks before the end of the summer. Some of his top advisers pushed back, including his PR chief, Jake Siewert, who reminded Solomon of the reputational hit the bank would take if it insisted on employees’ attendance while their kids were stuck at home and vaccines weren’t yet available. Solomon yielded, though the dispute dragged on. According to The Messenger, it got so tense that at one point he snapped to staff, “I can’t wait for the markets to turn so I can start firing you.”
Many Goldman bankers point to this juncture as when Solomon started to lose them. The bank was realizing staggering profits thanks in part to relatively junior employees whose workweeks had jumped from 80 to an unsustainable 120 hours. Solomon didn’t seem to empathize. In the middle of June 2020, he made a cameo on an episode of Showtime’s Billions, and the next month he DJ-ed a set as the opening act for the Chain-smokers at an outdoor concert in Water Mill, where maskless crowds formed in violation of social-distancing rules. Governor Andrew Cuomo tweeted that he was “appalled,” and Solomon apologized to the Goldman board.
“I really do think he believes he’s cool. But he’s not cool,” says a former employee. “The most fascinating thing about it is that what would make him cool is if he was liked internally. And if he actually leaned into his uncoolness, he’d be more likable.”
Solomon also started to lose Goldman’s female employees. He had become CEO in part by pledging to promote more of them from the back office and into divisions that make money and bestow power. He also tied bonuses to diversity metrics. But during the pandemic and after, those women leaders began leaving at a clip that was hard to ignore (though the total number of female partners has gone up). Several hired lawyers and alleged various degrees of sexism and discrimination. One such complaint included Solomon’s blowjob comment, which an insider later leaked to Bloomberg. Goldman’s lawyers paid off the departing employees enough times that Solomon tried to turn off the money spigot, asking to personally approve each payment. His legal and PR teams understood that the cases were losers regardless of merit. “If they went to a jury, the women definitely would have won,” says the ex-partner. “Because they would say, ‘Well, you’re the guy forcing everyone back to the office.’”
Some 200 partners have left the firm since Solomon took over. There’s always a level of churn at Goldman, but what’s striking is the seniority of the departing bankers, including division heads, members of the C-suite, and rising stars considered contenders to serve as future CEOs. They have gone on to positions at hedge funds, private companies, and start-ups — all preferable to working for Solomon. “It’s an important part of Goldman tradition for partners to leave for a wide range of new pursuits, and we wish them well,” Siewert said in March 2021, spinning an early wave of departures to the Times. Two months later, he quit too.
If Solomon were always right, no one in finance would care whether he blew up at underlings or rejected every opinion but his own. When you run the most powerful investment bank in the world, you’re supposed to be decisive. Yours is the only ego that matters, and it helps if everyone recognizes that. The problem for Solomon is that lately he has been wrong in consequential ways, opening the floodgates for criticism of his style of management by intimidation.
Post-crisis reforms had capped Goldman’s potential trading profits, and part of Solomon’s strategy to reinvent the bank and get it growing again was an aggressive push into Main Street banking, a.k.a. retail or consumer banking. Blankfein had started a consumer bank called Marcus — after the firm’s founder, Marcus Goldman — that would offer personal loans and high-yield savings accounts. Solomon accelerated the effort, devoting more resources and pushing the executives in charge to expand their ambitions. “David kept on telling them, ‘Go bigger, go bigger, go bigger,’ and made them spend more money than they should have,” says a person involved in the process.
Goldman also had a flagship venture with Apple to administer its first payment card, and Solomon saw it as a tantalizing new business, a chance to innovate in a market dominated by Chase’s surging Sapphire brand and American Express. For all of Goldman’s consumer products to be viable, he was adamant that Marcus offer a checking account. That would be expensive: Goldman was a latecomer to retail banking and would essentially need to pay customers to bring their money in the door. The executives in charge of Marcus — Harit Talwar and his deputy, Omer Ismail — tried to convince Solomon that checking was a bad idea, but he told them they lacked vision, according to people who witnessed the discussion.
To appeal to this new class of customers, Goldman had to recruit some very un-Goldman-like figures: people with experience in credit-card loans and branch banking. The new hires could feel the old guard’s condescension, and the two tribes were conspicuously separate. Solomon wanted his bankers in the office five days a week, but Marcus employees, many of whom came from the tech industry, were permitted to sometimes work from home.
Marcus strategy became the subject of frequent clashes. “I think David’s management style was leading the place by fear,” says a former partner. “If he didn’t like what you were saying, it was very classic ‘Let’s shoot the messenger,’ as opposed to ‘Let’s listen to the message.’ There would be a lot of yelling, and there would be a lot of public displays of anger.” Talwar resigned in late 2020; a few months later, so did Ismail, who took another partner with him to a new job.
“How could you do this to me?” Solomon exploded at Ismail, worried about how the string of departures would reflect on his leadership. He clawed back a significant chunk of the vested stock Ismail had accumulated — a virtually unprecedented move that shocked Goldman veterans. Solomon also blacklisted Ismail from attending the bank’s social events and alumni gatherings, putting him in the same ignominious company as Tim Leissner, a former partner who had pleaded guilty to federal charges in the Malaysia scandal. (Goldman disputes Ismail was shunned. As for the clawback, Fratto says, “Equity awards are governed by the agreement signed by the recipient. In this case, explicit terms were clearly violated, and Goldman Sachs upheld the terms.” Ismail and Talwar declined to comment.) Solomon’s treatment of Ismail, who had spent his entire career at Goldman, underlined to fellow lifers that even after more than 20 years, the CEO was still a lateral, someone who simply didn’t get the bank’s unwritten codes of loyalty.
In the summer of 2021, Solomon moved his office from the 41st floor — an enclave of mahogany and portraiture with sweeping views of the Statue of Liberty — to the 12th, adjacent to Goldman’s Sky Lobby, the most trafficked area of the firm. Despite the new proximity, many workers found Solomon as remote as ever. This was another way the CEO still seemed like an interloper. Generations of Goldmanites have learned that problems should be brought to bosses immediately; the easiest way to get fired is not to put up your hand and ask for help. The firm takes enormous risks on a daily basis, and the only responsible way to operate is to make sure you know about as many of them as possible. Solomon, though, had conditioned the people around him to avoid coming forward. “It’s the David and John show,” Solomon told partners who challenged him, referring to Waldron, the COO. Senior leaders felt disenfranchised and irrelevant — unacceptable emotions for people used to being Masters of the Universe.
Solomon’s insistence on ambitious goals and his intolerance for disappointment were a dangerous combination. A managing director who left recently told me about hearing a division head’s troubling confession: They had realized that targets for the checking-account product were “never going to fly with senior leadership, so I just doubled everything.” Some observers were reminded of Dick Fuld, the legendary misanthrope CEO of Lehman Brothers, whose deafness to dissent helped doom that bank in 2008.
Solomon kept pushing, completing a $1.7 billion acquisition of a start-up, GreenSky, that would allow the bank to make home-improvement loans. But the Marcus checking account was running far behind schedule, and the division was starting to look like a mishmash. Rising interest rates caused defaults on Apple cards to spike; more than a quarter of its credit-card borrowers had FICO scores under 660; most of its personal-loan customers were using the money to pay down other debt. Goldman Sachs suddenly had millions of customers who not only weren’t as rich as the bank’s longtime clients, but were struggling to make ends meet.
“At that point, the boat was on fire. We were hemorrhaging cash, we were operationally insolvent, and we’d made some bizarre deals,” says the former managing director. “A lot of people said Marcus had proved Goldman can be something different, and that is very much what I was sold. And then people were like, ‘No, this is still totally the vampire squid.’ We all just sort of got fooled.”
Some critics have suggested that perhaps Solomon was too distracted between DJ-ing and taking private planes to the Bahamas to kitesurf to see that Marcus had veered off course. But I think that narrative misses the point. Solomon is a workaholic, a CEO who never takes longer than three hours to respond to emails. It’s not that he wasn’t paying attention; it’s more likely that no one told him.
By the summer of 2022, regulators were investigating the credit-card business, and rumors were spreading that Goldman would ditch the consumer division entirely. In Dallas for an off-site strategy meeting, put up at an airport hotel, senior executives connected the dots. “We all suddenly realized we were in Texas for a completely fake exercise — planning to run a business that no one had any intention of running for another couple of months,” the former managing director says. Layoffs came two weeks later, and Solomon has since announced that much of the consumer business is for sale.
Goldman’s partners are likely rankled less by the loss of several billion dollars and more by the embarrassment. The bank can always make more money. It’s a lot harder to earn back prestige.
One read of Solomon’s intransigence is that he simply can’t help being prickly. He once got mad at me for writing that he had left a Miami nightclub at “almost 3 a.m.,” which I’d rounded up from 2:40 (with time-stamped photos to prove it). “That woman,” he told his staff in ire, “is an embellisher.” Solomon is notoriously literal. On a Goldman Sachs podcast, Siewert tossed him an easy question about how Wall Street had changed in his decades of experience there, and Solomon went for a geographically pedantic dunk. “I actually haven’t physically worked on Wall Street since 1984,” he said.
For much of Solomon’s remarkable career, he has had the financial performance to ignore suggestions that he change his personality. His execution during the pandemic made 2021 Goldman’s best fiscal year ever with profits of nearly $22 billion. Not long afterward, a member of the bank’s board learned Solomon was scheduled to play a set at Lollapalooza and confronted him about the cringey optics. “Listen, this is my hobby. Your hobby is playing golf,” Solomon said. The board member tried to sway the CEO: “No one has ever OD’d at Pine Valley or Shinnecock. There’s a reputational thing.” Solomon played the event anyway. Last year was Goldman’s second best by revenue, but it was down significantly from 2021, and the firm’s hiring spree during that time meant there were many more mouths to feed. When the annual review process began, employees learned the bonus pool was looking weak. They also heard rumblings that thousands of layoffs were likely, and for the first time, headlines about the bank’s bad morale began to include the possibility of Solomon’s ouster. “Grumbling Grows for Banking Giant Goldman to ‘Sach’ CEO Solomon,” the Post wrote just before Christmas.
The bank eliminated 3,200 jobs in January. The next month, many of the firm’s more than 400 partners flew to Miami for Goldman’s annual strategy meeting. They grilled the CEO about why the firm had to cull so many people, whether they would have to make further reductions, and most important, when they could all expect to make more money again. Solomon responded that he wished only that he had followed his instincts to fire people sooner. “As the environment was growing more complicated in Q2 of last year, every bone in my body believed we should be much more aggressive in slowing hiring and reducing head count,” he said, according to the Financial Times.
Later in February, reporters and analysts took notice when Solomon lost his cool onstage at Goldman’s Investor Day gathering: stammering, sighing audibly, and turning his back on analysts who pressed him for details on Marcus and the consumer-banking disaster. This was the testy and combative side he showed frequently behind closed doors but less often in public.
An even more revealing — and all but unnoticed — exchange happened a few days later. As chair of the board of trustees at his alma mater, Hamilton College, Solomon attended a networking event on campus in early March. Toward the end of the reception, a cluster of seniors approached Solomon with questions about the university’s energy investments. Three of them wrote a letter to the student newspaper, the Spectator, about what happened next. “Solomon’s attitude and behavior toward us and our questions carried extremely racist and sexist undertones,” they wrote. “His blatant ignorance and disrespect is one we feel obligated to share with the campus community.”
According to the students, they spoke with Solomon for 30 minutes, mostly about fossil-fuel divestment. The CEO offended them several times, claiming at one point that he “does more in a week to help climate change than we will ever do in our entire lives” and pointing to a home he bought in Vail that runs on geothermal energy.
“Solomon then said probably the most clearly racially charged sentiment,” the students wrote. “He pointed at each one of us, claiming that all of us must be on financial aid; he implied that we should show immense gratitude because we are in debt to the college’s endowment and that we should not complain about its investment portfolio. Once we all looked shocked at the claim, he quickly backtracked, citing the statistic that something like 80 percent of Hamilton students are on some kind of financial aid. It is important to note that the group of six or so people talking to him were all non-male and at least half were people of color. We believe that he never would have assumed we were all on financial aid if we were the group of white male students in suits talking to him 20 minutes prior.”
A Goldman spokesperson disputes the students’ claims as false. But they took notes on the encounter, writing down everything Solomon said, and shared them with me.
At least one of the students left the encounter in tears. “It was just so upsetting and appalling that someone would talk to us with that much blatant disrespect and disregard for us,” she told me. “In my life, I had never really been talked to like that, which was kind of stunning.”
Solomon appeared to think the interaction was a success. Later that evening, he approached one of the students at a campus pub and said that he “really enjoyed our conversation earlier.”
Solomon declined to be interviewed for this article, but Goldman’s official view is that his temperament is irrelevant as long as the bank is performing well. The firm’s press team thinks the partners need to grow a thicker skin when going head-to-head with their CEO. “We’ve spent time in politics, and this is just normal,” says Fratto, who used to work in the George W. Bush administration. “I can’t believe Goldman Sachs people get irritated about having to debate an issue when it’s literally what we did all day long back in our lives in politics.”
One difference between students at Hamilton and the Goldman executives leaking against Solomon to reporters is that the former group has nothing personally to gain. If Solomon loses his job, someone will likely move up from the inside, and the names that have been floated in the financial press include Waldron; Richard Gnodde, the CEO of Goldman Sachs International; Steve Scherr, a former chief financial officer; and Marc Nachmann and Jim Esposito, division leaders who might rule as co-CEOs. Waldron’s role may make him the leading prospect, but his closeness with Solomon — who was in Waldron’s wedding — might rule him out if the board were to seek a change. “That’s probably David’s greatest protection: lack of anybody that could plausibly take over,” says a banker who has been following the horse race.
Solomon serves at the pleasure of the board, not the partners, and voting him out might happen only if Goldman’s stock — which is down slightly this year, while the overall market is up — takes a major dip. “Investors understand the strategy, and it’s mostly been successful. There’s a reason the stock price is up 50 percent over the past five years,” says Fratto. But several current and former executives who have served on the management committee told me that what Solomon has done to lose the goodwill of the staff was serious enough to materially affect the future of the bank. “It always matters,” says a former partner. “The question is whether he still has the following as a leader inside the firm. Capturing the hearts and minds of the organization matters. Otherwise, it doesn’t work.”
Solomon has lately tried to win back the partners, hosting “cultural stewardship” events all over the world as well as cocktail parties at his homes for the firm’s elite and their spouses. But it doesn’t seem to have been enough to disabuse many partners of the suspicion, which they find deeply offensive, that he has put his own interests above those even of the famously self-interested Goldman Sachs. “I think he thought the platform was for his benefit, instead of he was serving this platform,” says an executive with decades of experience at the bank stretching back to the days when its position atop Wall Street was unquestioned. “People didn’t think it was cute. They thought it was a breach of contract.”