To become President Trump’s top economic adviser, Gary Cohn left behind the second-highest job at investment bank Goldman Sachs, a role that marked him as a contender to succeed Chief Executive Officer Lloyd Blankfein.
Now, Cohn is exiting the White House just as his former employer positions one of his two replacements for a job that’s among the most coveted on Wall Street. Following a discussion on succession planning in February, Goldman’s board selected 56-year-old David Solomon, who had been named co-president and co-chief operating officer last year, to fill both roles by himself, according to a person familiar with the matter.
Solomon’s promotion was announced Monday, in tandem with the retirement of Harvey Mitchell Schwartz, the other co-president.
“This effectively ends the race for who will be the next CEO, and we would expect a CEO transition at some point within the next year,” said Brian Kleinhanzl, an analyst with brokerage Keefe, Bruyette & Woods. Solomon joined the firm as a partner in 1999 and was co-head of investment banking prior to his joint-COO role.
The board didn’t discuss the timing of Blankfein’s retirement, the person familiar with the meeting said, and the announcement didn’t mention it. Blankfein demurred Friday when the Wall Street Journal reported that he was planning to leave as soon as the end of this year.
It’s the @WSJ‘s announcement…not mine. I feel like Huck Finn listening to his own eulogy.
— Lloyd Blankfein (@lloydblankfein) March 9, 2018
“I look forward to continuing to work closely with David in building our franchise around the world, serving our expanding client base and delivering strong returns for our shareholders,” Blankfein said, while also praising Schwartz’s contributions.
“Harvey has been a mentor to many, and his influence has made an indelible impact on generations of professionals at Goldman Sachs,” Blankfein said.
The 54-year-old was Goldman’s chief financial officer for four years before his promotion and previously held leadership positions across the firm, including in the securities and investment banking division. As CFO, the firm said, Schwartz played a pivotal part in helping Goldman adjust to major regulatory changes as the federal government imposed heightened oversight on lenders following the 2008 financial crisis.
His retirement is among the latest shifts in top personnel at the bank, which supplied a number of Trump’s closest advisers. Along with Cohn, Stephen Bannon, the former chief strategist; Anthony Scaramucci, the former communications director; and Dina Powell, Trump’s former national security adviser, were Goldman alums. Steve Mnuchin, who continues to serve as Treasury Secretary, worked at the bank in the early 2000s.
Powell, who left the administration this month, is returning to Goldman as a member of the management committee just as Trump faces a backlash from Wall Street and trading partners over double-digit tariffs on steel and aluminum imports. She will focus on enhancing Goldman’s relationships with sovereign clients worldwide, according to an internal memo obtained by the Washington Examiner.
Cohn, the former Goldman president who was director of the National Economic Council under Trump, announced his departure after failing to dissuade the the president from imposing the metals duties. The president hinted during a televised Cabinet meeting that Cohn might return, perhaps in a different role, since he’s a globalist and not as “strong” on the tariffs as Trump wanted.
Goldman’s stock, like that of other banks, has surged since Trump’s November 2016 election as the president appointed industry-friendly regulators and sought to loosen what he said were overly strict rules that had hindered economic growth.
A 50 percent gain Goldman’s stock price, which closed at $273.28 on Monday, still trails the performance of its some of its closest rivals, however, reflecting struggles last year in the bond-trading business. Morgan Stanley climbed 73 percent in the same period, while JPMorgan Chase added 68 percent.
