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Who Will Succeed Gary Cohn at Goldman Sachs?

December 11, 2016

[Photo:  Blankfein in Goldman's 4th Fl. Trading Room - Stephen Wilkes for Fortune]

 

There's a new round of C-Suite jockeying at Goldman Sachs, with the likely departure of Goldman President and COO Gary Cohn. And with Lloyd Blankfein’s decade-long tenure as Chairman and CEO, there’s no shortage of younger executives eager to advance. Look for Mr. Cohn’s duties to be split between 2 executives - Goldman has a history of management double-acts, which reflects either a collaborative fraternity stemming from its days as a private partnership or a cage fight designed to produce the fittest leader, depending on who you ask in the firm.

 

LIKELIEST CONTENDERS.    Heading the list are investment-banking co-chief David Solomon and CFO Harvey Schwartz.

 

Mr. Solomon, 54, is the longest-serving head of a major business line at Goldman – having spent a decade atop the firm’s investment-banking arm, which generates half the revenue of Goldman’s trading arm, but is twice as profitable. A former junk-bond salesman who joined Goldman as a rare lateral partner in 1999 from Bear Stearns, he’s respected, if not universally loved, inside the firm.

 

Mr. Schwartz, 52, CFO since 2013 when he replaced David Viniar, he's Goldman’s long-serving finance chief. Like Messrs. Blankfein and Cohn, he came up through the firm’s securities arm, though as a salesman rather than a trader. He lacks the white-shoe pedigree of many Goldman executives. A Rutgers graduate, he began his finance career far from Wall Street’s elite, first at J.B. Hanauer and then at First Interregional Equity, a muni bond-trading shop that later folded.

In 1997, Mr. Schwartz joined Goldman’s commodities unit, the same division that gave Messrs. Blankfein and Cohn their start.To some, Mr. Schwartz embodies the Darwinian ethos that drove Goldman’s trading desk in the last decade, but drew criticism in the wake of the crisis for putting the firm’s interests ahead of clients. Even into his tenure as CFO, he referred to clients as “counterparties.”

 

OTHER NAMES.    Chief technology officer Martin Chavez, a longtime associate of Mr. Blankfein, heads up an emerging power center at Goldman. A quarter of the bank’s 35,000 employees report to him - they are coders and engineers. Two executives in Goldman’s investment-management division are also bear consideration - Tim O’Neill, 63, a contemporary of Mr. Blankfein, which makes him an unlikely successor; and, co-head Eric Lane, who's still in his early 40s.

 

OTHERS IN PLAY FOR POWER POSITIONS.    The elevation of senior executives to fill Mr. Cohn’s role could create room for promotions lower down. Should Goldman need to appoint a new CFO, many inside the firm expect Stephen Scherr, who runs Goldman’s nascent consumer-banking effort, or Pablo Salame, a co-head of the securities division, to get the nod.

 

Should the bank choose to replace Mr. Solomon, who is one of 3 co-heads of the investment-banking division, likely candidates include Marc Nachmann, who oversees Goldman’s financing business, and Gregg Lemkau, a merger banker.