John Waldron, chief operating officer of Goldman Sachs Group Inc., and Goldman Sachs Chairman and CEO David Solomon.<\/p>\n
Jason Alden | Bloomberg | Angela Weiss | AFP | Getty Images<\/p>\n
Goldman Sachs<\/a> is on top of Wall Street right now, advising on more than $1 trillion in merger deals and generating more than $12 billion in equities revenue in the first six months of the year alone.<\/p>\n Those records make it all the more striking that Goldman’s board has reportedly<\/a> discussed replacing CEO David Solomon, 64, with president John Waldron, 57, as early as next year.<\/p>\n The succession plan, which would elevate Solomon to executive chairman, could be voted on by the bank’s board in coming months, The Wall Street Journal reported<\/a> late Monday.<\/p>\n The transition would be one of the “smoother and more deliberate” leadership handovers seen on Wall Street, Wells Fargo banking analyst Mike Mayo wrote Monday. <\/p>\n But there’s a key risk facing Goldman: Solomon may not be ready to give up his seat, and Waldron may not be willing to wait for it indefinitely. <\/p>\n Solomon has gotten Goldman back on track after an ill-fated foray<\/a> into consumer banking earlier in his tenure. With help from a deals rebound powered by the Trump administration and the artificial intelligence boom, Goldman is once again a clean story for investors: It’s the top pure-play investment bank.<\/p>\n “It’s just very hard for a person like that to decide they are really going to retire,” said retired University of Delaware law professor Charles Elson<\/a>. “Being 65 years old today is like being 55 was 30 years ago.”<\/p>\n Elson also noted that Solomon is chairman of Goldman’s board and holds outsized influence over the body, making it hard for him to be forced out. <\/p>\n Goldman spokesman Tony Fratto said there is “no definitive timeline for succession” at the bank. Bank boards often discuss succession planning over the near, medium and longer term. <\/p>\n ‘There will always be tension’<\/p>\n Another expert in CEO succession, Yale School of Management’s Jeffrey Sonnenfeld, said it would be bad governance if Goldman’s board was trying to “drive out a high performing CEO like David Solomon.”<\/p>\n Under Solomon, who took over as CEO in 2018, Goldman shares are up more than 300%, the second-best performance versus the KBW Bank Index<\/a>, according to Mayo. Only JPMorgan Chase<\/a> CEO Jamie Dimon<\/a>, who has led his firm for nearly 21 years, has done better.<\/p>\n That leaves Goldman in something of a bind: Even if Solomon is planning on leaving in a year, he has little incentive to say so. Doing so would\u00a0make him a lame duck with less influence inside the bank, according to Elson.<\/p>\n But if Solomon decides he wants to remain CEO amid an AI boom that he believes<\/a> is in its early innings, Waldron may tire of waiting for the crown.<\/p>\n After all, Waldron, Goldman’s president and chief operating officer, had reportedly been in discussions for leadership roles at alternative asset managers Apollo<\/a> and Carlyle<\/a>. <\/p>\n