Solomon seems determined to change minds. He has tried to make the white-shoe firm – named after Ivy League college footwear in the Fifties – appear less buttoned-up. Suits and ties are optional (Solomon often hits the decks in T-shirt and baseball cap). To flatten Goldman’s strict hierarchy, Solomon has introduced mini-town hall meetings for him and junior staff, letting them privately air grievances. The bank was notorious for the pressure it put on graduates, once telling them their weekends ended on Sunday morning.
Solomon is also seeking to make Goldman the most family friendly bank on Wall Street. Last week he announced it would pay up to $US20,000 ($29,200) to cover the costs of extracting or buying donated eggs and would give all US staff that are new parents at least 20 weeks leave. A year earlier, London staff were told Goldman would pay for sex-change surgery. Now Solomon has set his sights on its macho image, threatening to cut bosses’ pay if managers do not have a good enough reason for why there are no women in their team. Women are just 26 per cent of the exclusive partnership ranks, but it is the highest proportion in Goldman history, after more females than ever were promoted in the last round.
“The tide has definitely turned for the better,” says one insider. “Senior men have been told that they will be judged on how many women in their team leave. There are stories of people missing out on promotions because too many women left their team that year. The change might be from a low base, and it might be from fear more than anything else, but there has been a real shift in how women are treated and how much air time they get.”
Another agrees that the Solomon era has brought real change – “managers are way less aggressive than they once were” – but says this could simply be a sign of the times rather than evidence of the new chief executive’s policies. Either way, hardline bosses have finally clocked that their careers could be on the line if they don’t modernise.
In London the revolution has taken solid form – Goldman has moved into new £1 billion ($1.9 billion) headquarters, complete with lactation suites for breastfeeding mothers, a napping room for overworked bankers, a children’s art room and a nursery.
Solomon is not the first boss to attempt to shed Goldman’s ruthless image. Shortly before he was officially handed the reins the bank became the first company in the UK to pay for new mothers’ breast milk to be shipped back home when they’re travelling abroad (a benefit dismissed as a gimmick by staff at the time). One senior banker who worked at Goldman in the years after the crisis says he remembers a moment in 2010, after the bank was accused of hoodwinking investors by selling them a toxic package of mortgages for the benefit of another client, that those at the top decided it needed to “communicate better with the outside world”.
Blankfein waded in, becoming a public advocate for same-sex marriage in February 2012 (a move that he later said cost the bank at least one client).
Yet there were signs Goldman’s culture would be hard to shift. An ex-banker wrote a damning explanation in The New York Times as to why he left, accusing ex-colleagues of calling clients “muppets” in emails.
“I truly believe that this decline in the firm’s moral fibre represents the single most serious threat to its long-run survival,” wrote Greg Smith, who said his clients had an asset base of more than a trillion dollars. “Leadership used to be about ideas, setting an example. Today, if you make enough money for the firm you will be promoted into a position of influence.”
Solomon is clearly trying to set an example, although it is difficult to convince the world the bank has changed its spots when it continues to be embroiled in some of the largest financial scandals. Malaysia filed criminal charges against the bank and two former employees last December in connection with suspected money laundering at its state-run fund 1MDB. The bank, which has consistently denied any wrongdoing, has since been under scrutiny and Solomon started the year apologising to the people of Malaysia for the role an ex-banker played in the scandal.
Not everything needs changing. Insiders say they want Goldman to continue doing what it does best – making money – with one person saying the environment on the shop floor thankfully remains “very commercial” despite moves to soften the hard-nosed culture.
Solomon will be all too aware of this. The bank’s third-quarter results were disappointing, unusually missing analyst expectations after it was knocked by the slow deal environment and steep losses. It took a hit of around $US80m for its investment in troubled office rental firm WeWork, part of $US267m worth of losses from soured bets on firms that include taxi app Uber, which has lost $US1.1bn in the last three months. It will be hoping to mop up huge fees from oil giant Saudi Aramco’s stock market float, which could be the world’s biggest.
“It’s important for people to grow, but there’s got to be a clear and articulated path to profitability,” Solomon said recently.
“I think there’s a little more market discipline coming into play.”