As David Solomon’s tenure as CEO of Goldman Sachs hits a rough patch, reports of a new addition to the bank’s board are provoking fresh chatter.
On Monday, Bloomberg reported that the Wall Street giant had tapped Tom Montag, a controversial, hard-charging banker who is the former No. 2 executive at Bank of America. The story cast the move as Solomon “shoring up support” for his leadership, but multiple sources couldn’t figure out how.
On the face of it, for Solomon to tap a director who is viewed as friendly is generally considered a “weak move,” since it looks like a tacit admission that he doesn’t have the full support of the board, one Goldman insider told On The Money.
“If you’re at the point you need allies on the board, you’re admitting your board has lost confidence in you,” one Goldman insider told On The Money. “Appointing an ally means David thinks he needs more people to dilute those who dislike him.”
Indeed, sources said the report of Montag’s return to Goldman sparked “outrage” inside the bank’s headquarters on 200 West St. in lower Manhattan. That’s because Montag is seen by many as emblematic of the old-school Wall Street image the bank has worked to shake off.
“People are reading this as a big slap in the face,” one insider told The Post.
According to a lengthy New York Times profile of Montag, his “hard-driving approach has been increasingly out of step with the contemporary world of finance.” The report also highlighted that Montag settled an unusually large number of “credible allegations of misconduct or of working in a toxic environment… some of those complaints alleged gender-based harassment or discrimination.”
That’s an awkward fit for Goldman, according to some female bankers, given that Goldman this spring paid $215 million to settle accusations of rampant sex harassment and discrimination at the firm.
A source close to Goldman said talks for 66-year-old Montag to join the board have been going on for nearly a year. He is being picked for his serious risk-management bona fides after longtime board member Mark Winkelman retired this spring, according to the source.
The appointment of Montag hasn’t yet been announced, but the source said it is expected to be confirmed in the coming weeks.
That will come as a surprise to some insiders, with one saying he initially took the report as a “trial balloon” because it seemed like such a bad idea.
Many of Montag’s former colleagues are also upset that Goldman is embracing the aggressive executive. While he worked at Goldman Sachs for more than two decades, Montag left on a sour note when he exited the firm in 2008.
“He left in a huff — he thought he should’ve been promoted,” one source told On The Money.
What’s more, after his departure Montag tried to poach many Goldman employees — a fact that did not ingratiate him to Goldman’s then-leadership.
Another source pointed out that Montag appears to have engendered loyalty among his employees at Goldman. Otherwise, they wouldn’t have followed him, the source noted.
But if Montag has deep knowledge of banks, trading, and risk management, sources say there are plenty of others who also have that expertise – and without the baggage.
While many speculate that the Montag appointment is evidence of Solomon’s insecurity, others say the CEO who moonlights as DJ D-Sol, believes everything will quiet down. One source said he believes people will move on and that he’s confident he can hang onto his perch.
A spokesperson for Goldman declined to comment.
But skeptical observers don’t expect the drumbeat of resentment and frustration to be silenced anytime soon as top talent exits, firings persist and bonuses disappoint. Glum dealmakers noted that Goldman was left out of working on the Cava IPO – the first major public offering this year.
Goldman also faces multiple investigations into its disastrous handling of advising Silicon Valley Bank on a capital raise. And last week, CNBC reported that Goldman is likely to take a drastic writedown on its $2.2 billion acquisition of Greensky.
“If they have a blowout quarter, maybe they can silence people with that,” one source mused.
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