Goldman Sachs CEO Lloyd Blankfein is reportedly preparing to step down after more than three decades at the bank and 12 years in the top job. Who ends up replacing him will hint at where the bank is headed, according to Liz Hoffman, the Wall Street Journal reporter who broke the story.
The financial giant’s current Co-Presidents, Harvey Schwartz and David Solomon, are “the heirs apparent” for the role and come from the “two tribal factions of Wall Street,” Hoffman told Cheddar Friday. The pair also serve as Co-Chief Operating Officers at the bank.
Prior to their assuming their current roles, Solomon ran Goldman’s investment banking arm for 10 years while Schwartz served as the company’s Chief Financial Officer for around four years.
“They’ve got very different strengths and weaknesses,” said Hoffman. “Who’s promoted is going to say a lot about where Goldman sees itself over the next five to 10 years.”
Blankfein is one of the longest serving CEOs on Wall Street. He steered the bank out of the depths of the financial crisis that left Goldman with a tarnished image. Part of that plan included rolling out consumer lending to soften the bank’s image.
“Part of the sense, post-crisis, was that they got the bulk of the blame because no one knew what they did,” explained Hoffman. “They got blamed for the mortgage meltdown when they didn’t actually make any mortgages. So there was a real sense of secrecy.”
Blankfein did succeed in turning the bank around, and Hoffman pointed out that its stock price hit all time highs in recent weeks.
“He has had to work really hard to put Goldman on stable footing, to rehabilitate its image, to make it ‘cool’ again, which I would argue he’s actually done pretty well,” said Hoffman.
Blankfein’s exit plan comes just days after former Goldman Sachs President Gary Cohn resigned as President Trump’s top economic adviser, which led to speculation about Cohn’s return to the bank.
“There’s a lot of chatter about that. I would say they’re...very unrelated. Goldman has moved on,” said Hoffman.
For the full interview, click here.