Goldman Sachs finally made it official: David Solomon, an investment banker who rose through the ranks while finding time to pursue a hobby as an electronic dance music disc jockey, will be the next leader of the 149-year-old investment bank.
Solomon, 56, will now have time to put his stamp on the organization after officially being named as the incoming CEO. He will take on the chief executive role on Oct. 1, and Blankfein will remain chairman until the end of the year. Solomon will assume the dual titles of chairman and CEO after that.
The announcement marks the end of an era. Under Lloyd Blankfein's 12-year tenure, Goldman successfully navigated the financial crisis, making lucrative bets that the U.S. housing market would collapse. It stumbled in the public eye after being labeled a "vampire squid" by Rolling Stone magazine, but the true test for management came later, as the firm's vaunted trading businesses struggled under placid markets and heightened post-crisis regulation. That brought criticism from investors and analysts that the bank was slow to adjust to the new realities.
In response, Goldman unveiled a $5 billion revenue-boosting project in September, disclosing a plan to broaden its client base, find growth in smaller markets and push into consumer retail products. The consumer business offers savings accounts and loans, but could ultimately spread to credit cards, mortgages, car loans and life and health insurance through its Marcus brand, according to a May presentation from the bank.
Blankfein told employees in an email on Tuesday that the reality of the transition that is now in motion has been an opportunity to reflect on his time there. "When I've been asked about succession in the past, 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." he said.
"Today, I don’t want to retire from Goldman Sachs, but by my own perhaps convoluted logic, it feels like the right time."
Solomon worked at Drexel Burnham Lambert and Bear Stearns before joining Goldman as a partner in 1999. His ascent has been expected since he was named sole president of the bank in March, edging out his former co-President Harvey Schwartz. But the timing of the announcement came more quickly than many thought it would. It hadn't been expected until the fall.
Blankfein will retire from Goldman as chairman at the end of the year and will take the title senior chairman after his retirement. Solomon will join the bank's board on Oct. 1.
In a statement, Blankfein called Solomon the "right person" to lead the bank. And in his email to employees, Blankfein added, "I want to congratulate David. He's been a terrific partner to me and I look forward to watching him lead Goldman Sachs for years to come."
A former global co-head of investment banking, Solomon will have to focus on the Goldman's historic strengths in trading and advisory while also building out the firm's nascent businesses. Goldman's shares have lagged rivals this year, declining 10 percent.
Solomon, who is an electronic dance music disc jockey in his spare time under the name DJ D-Sol, has said employee diversity is a priority at Goldman and has cited his unusual hobby as an ice breaker in conversations with junior bankers.
“I am honored and humbled to have the opportunity to lead Goldman Sachs and I appreciate the confidence Lloyd and the Board of Directors have placed in me,” Solomon said in a statement. “I am excited about the opportunities for growth and know how vital our culture of client service and teamwork is to our success.”
Separately, Goldman Sachs reported second-quarter profit that beat expectations on strong revenue from its investment management and investing and lending divisions.