David Solomon, president of Goldman Sachs. (Photo: Bloomberg)
Lloyd Blankfein was about to bet the future of Goldman Sachs.
It was Feb. 21, and Blankfein had gathered with the Goldman Sachs Group Inc. board to reveal his long-awaited recommendation for the bank's next chief executive officer — the one who would steer the Wall Street giant through the next phase of its 149-year history.
His pick: David Solomon.
That decision, embraced by the board that Wednesday, has now officially set in motion one of the most closely watched successions in global finance. With the formal announcement of the move on Monday, Solomon's chief rival for the job, Harvey Schwartz, abruptly announced his resignation. The job is, in effect, now Solomon's to lose.
His rise to heir apparent prompts a host of questions for Goldman, including the big ones: when exactly will Blankfein make his handoff, and what will Solomon do then?
Blankfein and the board were impressed, insiders say, by Solomon's proven ability to build businesses at a time when the bank is looking to grow, the strength of the investment-banking team he put together, and his efforts to recruit and retain talent.
Blankfein traveled the week after the board meeting and didn't have a chance to discuss the decision with the two executives. It was only last week that Blankfein told them about the board's call, one of the people said.
Schwartz will leave the bank on April 20, and Solomon will serve as the sole president and chief operating officer, the New York-based company said in a statement Monday.
The question of Blankfein's successor has been a topic of debate across the financial industry since Friday, when the Wall Street Journal reported that the CEO would step down as early as the end of this year.
