Morning Coffee: Why Goldman Sachs needs more new partners with $950k salaries. The “loud” new CEO who declined a driver
This week, some of Wall Street’s most senior bankers will be waiting nervously on the results of an election. No, not that one – a very small vote, held by the Goldman Sachs management committee, to approve this year’s list of partner promotions. This is the top rank at GS, with exceptional pay and perks – a base salary of $950k, plus special investment opportunities and a cut of the firm’s profits. And it’s a famously competitive and rigorous process just to get through to the final vote.
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But there will be more happy news than in previous years. Bloomberg reports that the partnership class of 2024 will be the largest of David Solomon’s tenure, larger than the 80-strong class of ’22. (Goldman does Partner promotions in even numbered years and Managing Director promotions in odd years). That’s quite a change in policy for Solomon – back in 2020 and 2018, he was suggesting that the exclusive partner club needed to get more exclusive.
What’s changed? Many things, of which the most important two might be “the market” and “Goldman Sachs”. The 2018 promotion round came during a year that was decidedly mediocre for dealflow and absolutely awful for FICC trading revenue, while 2020 was quite early in the pandemic, and before anyone realised that a deal boom was on the way. Things got a lot better in 2022, but that was the beginning of a tough period for Solomon himself, as the consumer finance strategy began to unravel. Now, toward the end of 2024, Goldman can be reasonably confident that there will be good times ahead for a larger partner class to share. Equally importantly, now that retail banking and platforms are less central to the business model, the company’s
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