Goldman Gossip: Is DJ CEO being spun by predecessor in press?

On the struggles of Goldman Sachs CEO David Solomon

Image used under license from Shutterstock.com.

So, Goldman Sachs posted earnings this week. On the birthday of CEO, David Solomon, no less. Reportedly, it was a tough phone call, with Solomon on his back foot at times, given the worse-than-expected results. These came right after the bank laid off 3,200 employees on what was nick-named “David’s Demolition Day.” And right before Solomon jetted off to the World Economic Forum in Davos.

One of the reported highlights of the bloodbath was that employees were summoned to work for “phony” meetings. This, unfortunately, is not an uncommon practice on Wall Street. “How else do you do it?” one senior banker at a competitive firm asked me rhetorically. “It’s not nice. But everyone is a grown-up.”

Solomon has received extra criticism, perhaps because he is such an unusual Wall Street CEO. He’s a DJ at night. And there have been reports of his many weekend breaks on board the firm's private planes, and an investigation into whether the expense for those is justified.

People who know him say that the DJing could be seen as a way for him to make himself more relatable to his younger employees. But I’ve heard whispers from the 20-something crowd at Goldman that some resent their boss’s party image. “We’re working night and day, and he’s off DJing…come on,” one person told me, echoing the sentiments of a handful of others I reached last week. There was also the perception that the consumer business, Solomon’s idea, was a major contributor to the firm’s poor numbers – and a feeling that Solomon didn’t quite own that, instead blaming the wider economy and the wrong talent for the poor performance.

But there could be yet one more factor at play, responsible for some of the negative press. One person I spoke to pointed out that Solomon’s predecessor, Lloyd Blankfein, has “very tight relationships with the media.” Like Solomon, Blankfein is also unusual. In his case, that’s because he’s outspoken. He’s known for an overt, spiky, sometimes dark sense of humor on his Twitter feed, where his bio is “Former CEO on a gap year.” One example of Blankfein's Twitter humor:

Lloyd Blankfein @lloydblankfein

Been quarantined with my wife for four weeks now. At this point I have more risk of getting killed by her than by a crummy virus.

Is it possible, given this, that Blankfein has been gossiping with journalists about Goldman’s latest issues under his successor? Of course. There’s no law against that. But it hadn’t previously occurred to me that there could be reputational risk to those in corner offices from the former occupants of the very same offices!  There is only a seven year age gap between Blankfein and Solomon…

But, of course, the fundamental point is that if Goldman’s earnings were amazing, none of that would matter.