David Solomon to become next CEO
Solomon, 56, will now have time to put his stamp on his organization after officially being named as the incoming CEO. He will take on the CEO role on Oct. 1 and Blankfein will remain chairman until the end of the year.
The announcement marks the end of an era. Under Lloyd Blankfein's 12-year tenure, Goldman successfully navigated the financial crisis, making lucrative bets that the U.S. housing market would collapse. It stumbled in the public eye after being labeled a "Vampire Squid" by Rolling Stone magazine, but the true test for management came later, as the firm's vaunted trading businesses struggled under placid markets and heightened post-crisis regulation. That brought critiques from investors and analysts that the bank was slow to adjust to the new realities.
In response, Goldman unveiled a $5 billion revenue-boosting plan in September, disclosing a plan to broaden its client base, find growth in smaller markets and push into consumer retail products. The consumer business offers savings accounts and loans, but could ultimately spread to credit cards, mortgages, car loans and life and health insurance through its Marcus brand, according to a May presentation from the bank.
Solomon worked at Drexel Burnham Lambert and Bear Stearns before joining Goldman as a partner in 1999. His ascent has been expected since he was named sole president of the bank in March, edging out his former co-President Harvey Schwartz. But the timing of the announcement is coming sooner than first thought. Many had expected it wouldn't come until the fall.
The incoming CEO will have to focus on the firm's historic strengths in trading and advisory while also building out the firm's nascent businesses. Goldman's shares have lagged rivals this year, declining 9.2 percent.
Solomon, who is an electronic dance music disc jockey in his spare time under the name DJ D-Sol, has said employee diversity is a priority at Goldman and has cited his unusual hobby as an ice breaker in conversations with junior bankers.
Separately, Goldman Sachs was scheduled to report second-quarter earnings before the opening bell on Tuesday.