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Inside the latest drama at Goldman Sachs that reportedly has some partners up in arms

Inside the latest drama at Goldman Sachs that reportedly has some partners up in arms
  • Goldman Sachs recently established an investment-banking committee within its investment bank.

  • But, according to a new Financial Times report, two top partners in the bank were left off.

  • Their snub fueled an internal row and now the two bankers have warned they may quit, the FT added.

The drama playing out within the upper ranks of Goldman Sachs is continuing to unfold, and CEO David Solomon's troubles with senior partners don't appear to be over yet.

The latest consternation appears to do with who's been named to coveted seats on one of two new committees within the global banking and markets division. According to a Financial Times report on Wednesday, two top GS bankers were noticeably left off the IB committee, which doesn't wield the same powers or influence as the bank's management committee, but has nevertheless been framed as a launchpad for the bank's future leaders.

Mark Sorrell, a co-head of mergers and acquisitions, and Gonzalo Garcia, co-head of European investment banking, were left off the roughly dozen-person committee, and now are apparently threatening to leave the firm for good, the FT's Joshua Franklin and Arash Massoudi reported, citing "people familiar with the matter." Meanwhile, plenty of other big names were appointed, including longtime ascendant banker Kim Posnett, a partner and star within the firm's tech-banking practice.

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But what may be especially sensitive for people like Sorrell — son of British tycoon Sir Martin Sorrell, who founded the world's biggest advertising and PR group — is the appointment of his M&A co-head, Stephan Feldgoise. (Garcia's co-head of European investment banking, Anthony Gutman, is also said to have been named to the committee.)

BI reported in December that both Sorrell and Gutman were in the running to join the newly formed committee, along with Feldgoise, Posnett, and others.

Goldman Sachs declined to comment. Sorrell and Garcia did not immediately respond to requests for comment on Thursday.

Reading the Goldman tea leaves

The kerfuffle over who's snagged a seat on the IB committee comes as leadership at the top ranks of the bank is being shaken up.

The all-important management committee, responsible for setting policy and strategy across the bank, has been undergoing consequential changes, with high-profile names like Alison Mass and George Lee relinquishing their seats. Jim Esposito — a Goldman stalwart who was named one of three co-heads helming the global banking and markets division in 2022 — announced in January that he would soon step down from his day job, in favor of becoming a senior director.

Last year, Solomon battled a raft of internal unrest as senior partners pushed back on his consumer-banking ambitions for the legacy Wall Street firm, and vented about his decisions, leadership style, and even his side gig as a DJ.

In recent months, the CEO's fortunes appeared to have reversed themselves: Adebayo Ongulesi, the firm's recently-departed lead director, confirmed in the fall that Solomon has the board's backing and "is not going anywhere anytime soon," according to a note from a prominent equity research analyst.

Just last week, the bank hiked Solomon's 2023 payday to $31 million including cash and stock, an upgrade from the $25 million he earned the year before. And, at a recent partners' gathering in Miami, where Business Insider was on the scene, the vibe was relaxed and business-as-usual, suggesting that Solomon has restored a sense of calm to a previously choppy sea.

But the trickling-out of top talent at Goldman, which has been higher under Solomon than in previous years, shows little sign of abating.

Bloomberg reported this week that Beth Hammack — a longtime Goldman partner, co-head of the global financial group, member of the management committee, and former CEO of Goldman Sachs Bank USA — is set to step down. And when Esposito broke the news last month of his imminent departure in a note to partners and clients, he wrote, wistfully, that he planned to "bleed Goldman Sachs forever."

But after their snub from the investment-banking operating committee, it sure doesn't sound like that's how Sorrell and Garcia are feeling right now.

Are you a Goldman Sachs or Wall Street insider? Contact this reporter. Reed Alexander can be reached via email at ralexander@businessinsider.com, or SMS/the encrypted app Signal at (561) 247-5758.

Read the original article on Business Insider