Goldman Sachs Group Inc unexpectedly announced on Monday that Harvey Schwartz will retire from the bank, leaving David Solomon as sole president and chief operating officer and the most obvious successor to Chief Executive Lloyd Blankfein.
Goldman Sachs Group Inc unexpectedly announced on Monday that Harvey Schwartz will retire from the bank, leaving David Solomon as sole president and chief operating officer and the most obvious successor to Chief Executive Lloyd Blankfein. Schwartz and Solomon were named co-COO in December 2016 in a setup that appeared to pit the two against each other to eventually lead what is viewed as the most powerful US investment bank. The Wall Street bank’s board had discussed choosing a single COO at a meeting in February as part of ongoing succession planning and decided on Solomon, a person familiar with the matter said.
Speculation over the next leader had intensified after the Wall Street Journal reported on Friday that Blankfein, 63, was expected to retire as soon as this year and the bank was not looking beyond Schwartz and Solomon to replace him. Goldman did not comment on that report. Schwartz’s retirement eliminates a presumptive CEO candidate with a strong trading background and comes as Goldman Sachs has been trying to reinvent itself after market trends and regulations sapped profits from its once-lucrative trading business.
Schwartz, 53, will leave on April 20. He had been co-head of the bank’s trading division before being promoted to chief financial officer in 2013, while Solomon, 56, had been a co-head of investment banking at Goldman since 2006 until becoming co-COO. In September, Schwartz had outlined a target to grow revenue by $5 billion a year, after investors pressured the bank to be more transparent about its strategy outlook after two quarters of weak trading results. Setting up an investment banker to lead the firm would better align leadership with the bank’s focus and highlights the waning influence of the trading business, Wells Fargo analyst Mike Mayo said.
“This will be the first time in over a decade that a banker will be heading Goldman instead of a trader,” he said. “It sets a tone that the bankers are going to steer the ship incrementally more than the traders.” The bank typically maps out its succession planning by naming two or three candidates to top roles. Schwartz and Solomon were named to the co-COO roles after Gary Cohn left Goldman to become U.S. President Donald Trump’s chief economic adviser.
Cohn said last week he would resign, a move that came after he lost a fight over Trump’s plans for hefty steel and aluminum import tariffs. Goldman shares rose nearly 1.4 percent to hit a lifetime high in morning trade, and last traded up 0.7 percent at $272.69 by midday. Analysts viewed Schwartz’s retirement as a positive for the bank because it clarified the succession planning and appeared to remove the possibility of the bank having co-CEOs.