Some Goldman Sachs partners want to tell the board about their concerns over CEO David Solomon
Bill George, a former Goldman Sachs director and the author of a new book on leadership,"True North: Emerging Leader Edition," said boards have a complex job in keeping tabs on management, and that gathering an understanding of how other employees feel about the direction of the firm is a key component.
Charles Elson, a corporate governance expert at the University of Delaware, said that employee morale should be a major focus for any board.The Goldman Sachs headquarters stands in lower Manhattan.Last month, The Economist put a fine point on Goldman's current predicament, running a cover story titled"The humbling of Goldman Sachs.
Solomon began to lose the support of more partners when they and other executives caught on that losses in the consumer business had ballooned so much that it was going to affect their pay, according to the person. How could the CEO's pay be down only 29%, when partners were down as a group by 50%, current and former partners asked. In the global markets business, the division responsible for 54% of the firm's net revenue last year, compensation cuts ranged from less than 20% to 60% or more in some cases, according to someone who has spoken to a number of current partners.
In announcing Solomon's pay package in a securities filing, Goldman said that the compensation committee"considered, among other things, the firm's 2022 performance, both on an absolute basis and relative to peer results." One thing that has given the board confidence to stick with Solomon in recent months, according to someone who understands how important the board views Goldman's performance in relation to archrival Morgan Stanley, is the company's stock price relative to its peer.
"I heard some pretty long term more bullish-oriented investors really hitting a point of maximum frustration with Goldman on the back of the fourth-quarter call," Hawken said."There were no good answers."
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