By Justin Baer
Goldman Sachs Group Inc. has stepped up its efforts to groom a
new generation of leaders, as it broadens the list of executives
who could eventually run the Wall Street firm.
As part of those plans, Lloyd Blankfein, Goldman's chairman and
chief executive, has been arranging private dinner meetings between
younger managers and the firm's directors, according to people
familiar with the matter. The gatherings, which began last year,
are designed to showcase the executives' expertise on a variety of
topics that fall outside formal reviews of their businesses and
share the firm's views on important issues, the people said.
The dinners also aim to give the board a better understanding of
the firm's managerial talent as members help assess who among them
should advance to bigger jobs, the people said. While Goldman has
long sought to cultivate its best and brightest, the firm has added
to its efforts as it stepped out of the triage mode management
faced as it weathered the financial crisis and the Wall Street
backlash that followed.
The push comes as Mr. Blankfein, who took over in 2006 when
Henry Paulson became Treasury secretary, has shown no interest in
stepping down soon. "A job like this is hard to come by," Mr.
Blankfein, 59 years old, said in November at an industry
conference. "I'll be slow to get out of it."
Were Mr. Blankfein to retire suddenly, Gary Cohn, the firm's
53-year-old president, remains the board's choice for the top job,
people familiar with the matter said. But the open-ended nature of
Mr. Blankfein's commitment increases the chance that Mr. Cohn's
window to run the firm will close before a successor is needed,
current and former Goldman executives said.
"Goldman has always worked to develop a deep bench of talent
across all of our businesses, but speculation about succession
planning is inevitably ill-informed," a Goldman spokesman said.
The next wave includes Chief Financial Officer Harvey Schwartz,
50, investment banking co-head David Solomon, and Michael Sherwood,
a vice chairman and co-CEO of Goldman's European business. Mr.
Solomon was 52 years old and Mr. Sherwood was 48 as of earlier this
year. A rung below them are managers such as Stephen Scherr, 50,
the recently appointed chief strategy officer, according to people
familiar with the bank.
Mr. Schwartz was co-head of the securities arm until his
appointment to chief financial officer in 2013. Mr. Solomon, as a
co-head of investment banking, helps oversee a division that has
expanded in importance as the long-powerful trading business
encounters regulatory and other challenges.
Mr. Sherwood is one of three vice chairmen at the firm. He has
been co-CEO of Goldman's European business since 2005 and was put
in charge of the firm's initiatives in emerging markets in
November.
Both Messrs. Blankfein and Cohn have outlasted most of their
counterparts at other big banks. While the stability in Goldman's
top echelons has helped the firm navigate the financial crisis, the
top executives' longevity also has slowed the upward progress of
the next wave of leaders, compelling Goldman to find ways to keep
them, people familiar with the matter said.
Some Goldman executives have cautioned against counting out Mr.
Cohn. The onetime commodities trader has had a seat on Goldman's
13-member board since 2006 and has worked to raise his profile with
clients, investors and regulators. Mr. Cohn is about six years
younger than Mr. Blankfein.
Of course, any firm with a long-tenured CEO has to handle some
of the same management issues that Goldman is encountering. Goldman
has faced several high-level departures since the crisis, including
finance chief David Viniar; Vice Chairman J. Michael Evans and
co-President Jon Winkelried. (Mr. Viniar joined Goldman's board
after leaving as CFO.)
The board dinners thus far have featured leaders of the firm's
major divisions, including Pablo Salame, co-head of Goldman's
securities arm, as well as others such as Paul Russo, co-COO of
equities, and Anthony Noto, a technology banker who left the firm
in June and was recently named finance chief at Twitter Inc., a
former client, the people said.
Goldman's succession plans have been fluid in the past. In the
early part of the last decade, the two executives once viewed as
Mr. Paulson's most likely successors, John Thain and John Thornton,
left the firm amid Mr. Blankfein's ascent to the top job.
Still, the move to give more of a spotlight to Goldman's
management depth has been gaining ground. In February, the firm
added five executives to its management committee, raising the
total to 34 members: Mr. Russo and his co-head, Michael Daffey;
credit-trading chief Justin Gmelich; Sarah Smith, chief accounting
officer; and Craig Broderick, Goldman's top risk manager.
Write to Justin Baer at justin.baer@wsj.com
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