Goldman Sachs president and chief operating officer David Solomon has been officially named as the next CEO of the Wall Street bank, taking over for longtime CEO Lloyd Blankfein on Oct. 1.
Rumors that Blankfein would be stepping down as CEO started circulating earlier this year, and his carefully-managed exit plan was designed to allow Solomon a smooth transition to build a legacy on his own terms.
“This is the ideal, classic, textbook succession process,” senior associate dean for leadership studies at the Yale School of Management Jeffrey Sonnenfeld told Chief Executive. “Lloyd had groomed several alternative candidates—they had very strong bench strength—and then picked a battle-tested, perfect candidate who had been in various tryout positions to prove himself, most recently as president. And he leaves under his own power with his interests, his energy and his warmth intact. It’s really remarkable and he’s got a lot to be proud of.”
Out of the gate, Solomon will likely be focusing on the shifting global economy and U.S. relationships with trade partners before digging in on broader goals.
“Right now, the world order is going through some realignment and how things shake out with Washington’s trade practices will probably consume a good deal of his time,” Sonnenfeld says. “He’s a good-natured, analytic guy that I think will have no problem figuring it out, but he hits the ground running with a lot of global sophistication. At this stage, it will not be on-the-job learning for him.”
“This is the ideal, classic, textbook succession process.”
– Jeffrey Sonnenfeld
Solomon’s standing within the Goldman Sachs organization will also be an asset as he takes over the top job later this year.
“Everyone inside Goldman likes him. Sometimes you’ll see people that play to one constituency versus another, but that’s not him,” Sonnenfeld says. “So when there’s good news he’ll know how to showcase it, and when there’s bad news he’ll know about it early and be able to figure out corrective measures. He won’t be someone who’s surprised by some failed risk analysis.”
As far as Blankfein’s next move after stepping down, Sonnenfeld says that he’s likely to focus on community engagement on some level. “It will be something with institutional engagement that will really matter,” Sonnenfeld says. “I could see him getting involved with some entrepreneurial ideas, getting involved with major city renewals, and serving on a small number of boards with some kind of chairmanship or lead director title where he can provide guidance. He’s a fabulous mentor.”
Blankfein says that Solomon will take Goldman Sachs to the next level as CEO in coming years.
“David is the right person to lead Goldman Sachs,” Blankfein said in a statement. “He has demonstrated a proven ability to build and grow businesses, identified creative ways to enhance our culture and has put clients at the center of our strategy. Through the talent of our people and the quality of our client franchise, Goldman Sachs is poised to realize the next stage of growth.”
Solomon joined Goldman Sachs as a partner in 1999, and prior to being named president and COO served as co-head of the bank’s investment banking division, and global head of its financing group. Blankfein joined Goldman Sachs in 1982 and has served as chairman and CEO since 2006, steering the firm through the 2008 financial crisis. Over the course of his career he managed Goldman Sachs’ Currency and Commodities Division, as well as its Fixed Income, Currency and Commodities Division and Equities Division.