David Solomon, CEO of Goldman Sachs & Co., listens during the Milken Institute Global Conference in Beverly Hills, California, USA, on Monday, April 29, 2019.
Kyle Grillot | Bloomberg | Getty Images
David Solomon cleans the house of Goldman Sachs.
At least a dozen partners are negotiating to leave the firm in the coming weeks, according to someone with knowledge of the situation.
This move comes as Solomon, near his one-year anniversary as CEO of Goldman Sachs, insists on an internal review of the company's business. The process, which requires executives to commit to financial goals enshrined in multi-year plans, ignited a shakeup among longtime bank executives, the man said.
The partners sit at the top of the hierarchy at Goldman Sachs, the only bank among the largest US companies to still use the term. This is a return to the time when Goldman was a private partnership, which means that the partners took their own money and reaped a percentage of the bank's profits.
Although this deal ended with the bank's IPO in 1
A group of about 450 partners has swelled in recent years and Solomon's moves are considered to make the title more exceptional. It will also reduce costs as the bank takes several costly initiatives, including a boost in consumer lending and wealth management for the masses.
Most or all of the leaving partners have achieved this rank below one of Solomon's predecessors. As it continues to create new businesses, departures will open fresh blood slots in key roles, solidifying Solomon's loyalty to managers and providing incentives for a new generation of bankers.
This is only the last move Solomon has made to put his mark on the organization: Last year, he appointed Stephen Cherr as CFO and John Waldron as president, setting a cascade of changes.
Among those considering retiring are Elisha Weisel, chief information officer of the bank, and Stephen Strongin, head of research, according to the Wall Street Journal, which first reported the partner's eviction. All told, 15% of the bank's partners will leave this year, according to the magazine.
The bank first revealed that it was undertaking a back-to-back review in October, shortly after Solomon officially took over as CEO.
The need was clear: Goldman was lagging behind rivals like JP Morgan Chase in its shareholder performance because of its dependence on Wall Street trading and other activities. Scherr said the purpose of the review is to increase shareholder returns, he said.
But the project took longer than expected. While the bank was supposed to update investors in the review earlier this year, in April the bank said it would unveil the plan in the first quarter of 2020.