Almost half of Goldman Sachs new partners are women or minorities

Women and ethnic minorities make up nearly half of Goldman Sachs’ new crop of partners, reducing white male dominance at one of Wall Street’s most exclusive clubs in a year admissions have fallen to their lowest level in decades.

Goldman appointed 60 new partners on Thursday, down from 69 last year and well below the roughly 100 typically appointed in biennial cycles during the time of Lloyd Blankfein, Goldman’s chief executive from 2006 to late 2018.

The final group includes 32 white men, giving them a 53 percent share of promotions, the smallest demographic representation on record. The share of new investment banking and trading partners from Goldman’s traditional powers has also fallen to 66 percent, from 71 percent two years ago.

David Solomon, CEO, decided to reduce the number of partners and increase the financial benefits they enjoy, as well as broaden the composition of the partnership to reflect the evolution of Goldman’s business, which is branching out into areas such than digital banking and cash. management. The latest promotions have also continued the trend of appointing more partners in areas such as operations and risk.

“Goldman Sachs’ strong partnership ethic has always been at the heart of our culture,” said Mr. Solomon.

Following the new elevations and a higher number of departures than usual in recent years, the partnership now has fewer than 440 in a company that employs around 38,000 people.

More than 20 years after a stock market listing dissolved its original partnership, Goldman awards the title to its star artists, touting the practice as a differentiator from other major Wall Street groups in the battle to attract and retain talent. .

Goldman partners receive a salary increase of a base salary of $ 950,000 and exclusive investment opportunities, which have just been expanded to include “carried interest” in Goldman’s private equity funds. The interest earned, a share of the future profits of the funds, is taxed at a capital gains rate that is generally much lower than the beneficiary tax rate.

Women make up 27% of the new class, surpassing the previous high of 26% in 2018. The bank said 17% of new partners were Asian, 7% were black and 5% Hispanic or Latino.

According to a Financial Times study, those who become partners have a typical eight-year term, Goldman says, although a good proportion leave earlier.

“I see it kind of like ‘Special Forces’ – the challenge is to become one, then you do it for a while and then you move on to other fun things,” said a former partner, who has gone for a fund. speculative six. years after his promotion.

An FT analysis of partner classes from 2010 to 2016 shows that partners in the 2010s left at the highest rate, with more than 18% departures within four years.

The class of 2012 was the least likely to leave, with just 10 percent of those leaving in the first four years. Women were less likely to leave than men each year.

A partner from 2010 said the financial benefits of the partnership were less than his expectations and the investment opportunities were less lucrative in the years immediately after the financial crisis.