Is David Solomon too big a jerk to run Goldman Sachs?
That was the headline of a recent New York Magazine piece, and many on Wall Street are pondering the question following a piece that could politely be described as unflattering. The atmosphere at Goldman is alleged to be more toxic now than during the global financial crisis, when the company was famously described by then Rolling Stone writer Matt Taibbi as a “great vampire squid wrapped around the face of humanity”.
If so, Solomon might feel sore that his abrasive personality is deemed by mutineers to be a graver problem than nearly wrecking the global economy. Despite recent woes, Solomon’s record since taking the helm in 2018 can be defended, argued former Credit Suisse analyst Rupak Ghose in a Financial Times piece last week.
He cited book value growth, strong market shares, and “best-in-class” risk management, metrics that are reflected in Goldman shares having gained almost 50 per cent since Solomon took charge. The KBW US banks index is down more than 20 per cent over the same period.
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With the exception of Morgan Stanley, Goldman shares have outperformed every other large US bank. To answer the original question: yes, suggests Ghose, you can afford to be a bit of a jerk if you have very good performance.
