Goldman Sachs Group Inc. (NYSE:GS) CEO, David Solomon, defended his leadership on Thursday in an interview with CNBC's David Faber. This follows a series of media reports questioning his leadership style and strategic decisions, leading to a wave of criticism from within the company and outside.
Solomon responded to the criticism by stating that he does not recognize the negative portrayal of his character in the media. He also mentioned that he is always reflecting on his leadership and looking for ways to improve, regardless of what he reads in the press.
The CEO attributed some of the criticism to lower bonuses in 2022 and operational changes within the bank. He referred to these complaints as "noise" created by lower 2022 bonuses and changes in operations, including consolidation in the bank's asset management division.
Solomon has faced criticism on various issues, including canceling "summer Fridays" at the bank and Goldman's retreat from consumer banking. The bank also faces a Justice Department inquiry into Goldman's role as both a banker and acquirer of Silicon Valley Bank securities leading up to that bank's collapse in March.
In response to concerns about his hobby as a disc jockey being a distraction, Solomon confirmed he is no longer spending time as a DJ and that his sole focus is Goldman Sachs.
Despite the criticism, Solomon remains optimistic about Goldman Sachs' prospects. He noted that while 200 partners have left the firm in recent years, the turnover rate has not changed from its historic past as it constantly refreshes its stable of 400 partners.
He expressed optimism about the upcoming initial public offering from chip maker Arm Holdings Ltd., for which Goldman Sachs is a lead underwriter. Solomon suggested that if this IPO goes well, it could signal a meaningful increase in activity in capital markets.
Regarding regulatory matters, Solomon stated that Goldman Sachs plans to join other banks in pushing back against stricter capital requirements proposed by the U.S. Federal Reserve and the FDIC. He argued that these new capital rules may hurt economic growth without significantly increasing safety and soundness.
Solomon took over as CEO from Lloyd Blankfein in 2018 and has since made significant changes to the bank's operations, including three reorganizations. These changes have resulted in thousands of layoffs at Goldman Sachs and about $3 billion in losses in its platform solutions unit since 2020. Despite these challenges, Goldman Sachs stock is up about 37% over the last five years.
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