It’s official at long last: David Solomon will inherit the crown from Lloyd Blankfein at Goldman Sachs Group Inc.
The news, announced Tuesday — after more than a year of jockeying, choreography and speculation — fully and finally sets in motion one of the most significant succession plays on Wall Street.
On Oct. 1, just 76 days from now, Solomon will start running Goldman Sachs, which sits at the center of more concentric circles of money and power than perhaps any other firm in the industry.
Between now and then, Solomon has a freer hand in carrying out critical leadership changes that have been expected after Blankfein’s 12-year-run as the CEO. Blankfein could get as much as $84.7 million in compensation when he departs after 36 years at the investment bank.
Even before Tuesday’s announcement, a shakeup in the trading division in May had insiders pointing to a more assertive role being played by Solomon.
This is only the second handover in Goldman’s two-decade run as a public company — insiders and outsiders alike are calculating the winners and losers.
Blankfein, for his part, isn’t going out near the bottom: he has helped bring its vaunted trading division back to even footing after stumbles last year and leaves behind a firm that has made inroads into new and varied corners of finance.
Yet, for a man who has joked he would die at his desk, the transition has arrived sooner than even he might have expected.
“Today, I don’t want to retire from Goldman Sachs, but by my own perhaps convoluted logic, it feels like the right time,” Blankfein said in a note to staff. “It’s always been hard for me to imagine leaving. When times are tougher, you can’t leave. And, when times are better, you don’t want to leave.”
Blankfein, 63, has previously admitted that he’d have to give up the top spot before he was ready to move on, and has said that Solomon would benefit from more time in the president job.
“Once the process starts, you become a lame duck,” said Charles Peabody, a veteran banking analyst. “It’s hard to stay on and feel like you are a productive part of it after that.”
When Solomon, 56, does take the reins, he will be the oldest new leader at the firm in almost 50 years. Solomon is the fourth chief operating officer under Blankfein’s reign, with the previous three having exited the firm having seen their path to the top curtailed.
Blankfein will relinquish his role as chairman at the end of the year, which will also be taken on by Solomon.
Rise to the Top
Solomon’s stature as the heir apparent was cemented in March, when the firm announced that he would become sole president while Harvey Schwartz — his chief rival for the job — would leave the company.
The handover is taking place as the firm diversifies away from its trading operations, a traditional profit center, and pushing deeper into newer areas like consumer lending.