Goldman Sachs signals likely CEO pick as it shifts strategy

Goldman Sachs signals likely CEO pick as it shifts strategy

Blankfein had good news for Solomon and bad news for his rival Harvey Schwartz when he told the two men last week that Solomon was likely to be the firm's next CEO, people familiar with the matter told The Wall Street Journal.

Goldman Sachs (GS) said David Solomon will become sole president of the company, elevating him over Harvey Schwartz as the eventual successor to Chief Executive Officer Lloyd Blankfein.

Solomon and Schwartz have been directly competing for Blankfein's endorsement - and by extension, a shot at the top job - since being promoted to co-presidents in late 2016, after Gary Cohn left to join Donald Trump's administration. "I want to thank Harvey for all he's done for the firm", Blankfein said.

"We were expecting it to come to a conclusion at some point, but for it to happen this quickly was a surprise", Brian Kleinhanzl, a manager director and lead bank analyst for Keefe, Bruyette, and Woods, said of Goldman's succession announcement. Although this was already hinted at by The Wall Street Journal last week, Goldman Sachs seemingly confirmed it Monday morning. UBS sees expansion into new businesses likely to continue under Solomon, given his diverse background - in other words, "not another trader".

Solomon, 56, a former investment banker, has been boosted by the strength in that business, where Goldman Sachs posted record revenue in 2017.

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As performance within the trading division has faced clear headwinds over the past couple of years, "a change in leadership may provide fresh perspective" as the firm strives to achieve more than $5 billion in net revenue opportunities over the next few years.

The decision to go with Solomon shows that Goldman Sachs likes to "think of themselves as a tech company, and you have to have some bit of irreverence at the top of management in that kind of company", Kleinhanzl said.

Mr Schwartz served five years as global co-head of the securities division, before being named CFO in 2013.

Solomon has also taken on a leading role in the firm's diversity push, including presenting ideas to the board last June.

Solomon doesn't sound like your typical bank CEO.

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