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The Wall Street firm is about to name its smallest class of new partners for years this week, according to people familiar with the subject. This is the first promotions campaign led by Chief Executive Officer David Solomon to maintain the exclusivity of Goldman's top echelons and offset the recent influx of outside hires.
Fewer than 65 people are likely to get the green light, people said. This would be the smallest class since 1998, when Goldman was still a private company, and less than the 84 promoted two years ago.
Being a Goldman partner meant once tying his personal fortune to that of the company. From its inception in 1869 to its initial public offering in 1999, Goldman's partners have fueled their balance sheets by sharing their profits and making them suffer losses.
Today, the title is largely symbolic: partners own less than 5% of society. However, the selection process, which takes place every two years, remains a central element of Goldman's identity, a means of rewarding and motivating employees and preserving the company's culture.
Candidates are reviewed by a group of senior executives – a process known internally as a "crossover mix", a term borrowed from Bridge, but not interviewed themselves. If they are selected, they can expect to hear personally the news from Goldman's CEO.
Solomon told managers to be very selective this year, people close to the process said. Fewer people have been counted and less last-minute lobbying has been added to the final list in recent years.
Mr. Solomon, who took office as CEO a month ago, aims to maintain the partnership, avoid weakening Goldman's senior ranks and focus power among those who are able to generate business . The partnership has grown from 221 at the time of the IPO to around 435 today.
Also reduce the size of this year's class: more than a dozen foreigners joined the firm as side partners in the past year. This is unusual for Goldman, who tends to promote from within and has aroused the blame of existing employees while the news of a smaller 2018 class has spread.
Partners represent just over 1% of Goldman's employees and earn a minimum salary of approximately $ 1 million, with bonuses that can be incremental multiples and access to firm investment funds.
They are responsible for preserving the culture and reputation of the company – a responsibility that has taken on a new significance after Goldman's former partner, Timothy Leissner, pleaded guilty to his role in a scam that embezzled billions of dollars. dollars from 1Malaysia Development Bhd, or 1MDB, the Malaysian Sovereignty Fund.
According to a Wall Street Journal analysis, about a third of Goldman's partners are business bankers and a quarter of traders or sellers of securities. Fourteen were already partners when Goldman became public in 1999, which allowed him to become fabulously rich. Two-thirds have been promoted since 2008 and have evolved in a less dense environment.
Only about 15% are women and they are twice as represented in back-office functions as operations and human resources as in trading or banking activities. Increasing this number is a priority for Solomon, the father of two daughters, who has set a target for gender parity in the junior ranks of Goldman by 2021.
Mr. Solomon, a former investment banker, has reserved fewer partner seats to support functions, the Wall Street Journal reported earlier this year. After the financial crisis, Goldman strongly encouraged its legal, compliance and control services, in part to show regulators that it was taking the 2008 lessons seriously. Seven Goldman lawyers are partners.
Write to Liz Hoffman at [email protected]
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