By Dow Jones Business News,
July 07, 2014, 07:07:00 PM EDT
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
"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
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 firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2014 Dow Jones & Company, Inc.