Here's what investors say they want out of the next Goldman Sachs CEO - and where Lloyd Blankfein fell short
- David Solomon is now the heir apparent to Goldman Sachs CEO Lloyd Blankfein.
- Procensus, a data company that aggregates and analyzes investor sentiment, surveyed investors on the succession. According to results seen by Business Insider, 19 investors from firms with a combined $11 trillion in assets under management responded, with nearly 75% saying Solomon was the best choice.
- Investors largely approved of Lloyd Blankfein's performance, but there was a key area they said Solomon could improve upon.
The succession plan at Goldman Sachs has crystallized, with COO David Solomon set to take the reins once CEO Lloyd Blankfein clears out, likely in the next year or so, according to reports.
So, what are investors hoping for out of the next regime at America's most prestigious investment bank?
Procensus, a data company that aggregates and analyzes investor sentiment, surveyed investors on the succession. And according to results seen by Business Insider, 19 investors from firms with more than $11 trillion in combined assets under management responded, with most respondents optimistic about Solomon leading the company. Nearly 75% said he was the best candidate to replace Blankfein.
"Investors appear cautiously positive about David Solomon being the heir apparent at GS. Almost three quarters of respondents see him as the best choice for the job, with former GS president Gary Cohn the only other potential candidate to attract more than a single vote," Procensus said in its report.
Investors largely approved of Blankfein, but they see room for improvement.
When asked what the next CEO could do to improve upon Blankfein's performance, some highlighted the bank's need to increase earnings power and better allocate capital, but the most frequent request was for better communication, with a "high proportion of investors requesting more engagement and better disclosure from GS."
A sample of the responses:
- "Improve disclosures. More frank discussion of capital allocation."
- "Allocate capital better and improve disclosure and market communication"
- "Increase transparency on conference calls and earnings releases."
- "More disclosure within Trading businesses, particularly FICC."
- "Participate on earnings calls!"
A number of respondents also said the bank should shift away from FICC, with one saying they'd like to see the bank "refocus on banking," another saying the bank should "allocate capital away from the trading business," and a third saying the bank should do more business with corporates, and "recognize pricing risky assets is no longer a competitive advantage."
Solomon for his part has played a key role in devising Goldman's growth initiatives, such as focusing on winning more business from corporate clients, and pushing new businesses like the bank's Marcus offering.
One respondent said Solomon's position as the heir apparent "definitely confirms a big pivot in the strategic focus and mix at the company."