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David Solomon · The David Rubenstein Show

• 0:03
  Speaker 1: One of the most significant investment banks in the world
• 0:05
  Speaker 1: is Goldman Sachs. It's had a gloried history. Recently, I
• 0:08
  Speaker 1: had a chance to sit down with the current CEO
• 0:10
  Speaker 1: of that firm, David Solomon, to ask him about the
• 0:13
  Speaker 1: Federal Reserve, operating Goldman Sachs, and the current economic environment.
• 0:17
  Speaker 1: So let's talk about some government matters. Now, you're in Washington,
• 0:22
  Speaker 1: the Federal Reserve. You've talked about the importance of the
• 0:25
  Speaker 1: FED being independent. So are you worried about the independence
• 0:29
  Speaker 1: of the FED? And the Secretary of Treasuries announced five
• 0:31
  Speaker 1: potential next chairs of the FED. Any of them or
• 0:36
  Speaker 1: all of them acceptable to you?
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  Speaker 2: Well, let's get right into it.
• 0:41
  Speaker 1: David.
• 0:44
  Speaker 2: First of all, I just say and I think it's
• 0:46
  Speaker 2: a point that's worth emphasizing central bank independence, not just
• 0:50
  Speaker 2: here in the United States, but around the world. I
• 0:52
  Speaker 2: think it's served us very very well, and I think
• 0:54
  Speaker 2: it's something that we should speak out for, we should
• 0:57
  Speaker 2: strive for, and I think it's important. I'm not going
• 1:00
  Speaker 2: to comment on the individuals other than to say I
• 1:02
  Speaker 2: think all five individuals, you know, carry skills and experience
• 1:06
  Speaker 2: that could make them credible candidates to be a FED chair.
• 1:09
  Speaker 2: I think we all know that there's one person that's
• 1:11
  Speaker 2: going to make that decision is to the next Ed Shair.
• 1:13
  Speaker 1: And sometimes the government of the United States is moving
• 1:16
  Speaker 1: oscillating its policies a bit. Going tariffs are the things
• 1:20
  Speaker 1: Has that made it difficult to do well on Wall
• 1:22
  Speaker 1: Street for Wall Street firms or the Wall Street firms
• 1:25
  Speaker 1: seen to be doing okay? But has the changing in
• 1:27
  Speaker 1: policy of what the tariff we're having here or not
• 1:29
  Speaker 1: having it or other kinds of things, has it been
• 1:31
  Speaker 1: difficult for Wall Street firms to deal with what the
• 1:34
  Speaker 1: administration is doing or is actually not a big.
• 1:36
  Speaker 2: Problem government policy makers? You know, there's always uncertainty, there's
• 1:42
  Speaker 2: always unpredictability in all different kinds of administrations. And I
• 1:47
  Speaker 2: think our job as business leaders is to adapt and
• 1:50
  Speaker 2: to adjust and deal with it. Can'tidy. I think that's
• 1:53
  Speaker 2: that's what I think we do. Right.
• 1:54
  Speaker 1: So, the debt of the United States is now thirty
• 1:56
  Speaker 1: eight trillion dollars. Some people would say that's a lot.
• 2:00
  Speaker 1: Why is the businessman not worried about? As a general,
• 2:02
  Speaker 1: they don't seem to be as worried about the thirty
• 2:04
  Speaker 1: eight trillion as I would have thought they would be well.
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  Speaker 2: I speak to a lot of people in the business
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  Speaker 2: community and a lot of people in the financial community,
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  Speaker 2: and I think people are worried about the level of
• 2:12
  Speaker 2: debt and the fact that we've reached a point. And
• 2:16
  Speaker 2: by the way, this is true in the United States,
• 2:17
  Speaker 2: but it's true when every developed economy where kind of
• 2:20
  Speaker 2: fiscal stimulus and an aggressive fiscal play is really just
• 2:24
  Speaker 2: kind of embedded in the way these democratic economies are operating.
• 2:28
  Speaker 2: And it's accelerated meaningfully in the last five years. I
• 2:32
  Speaker 2: think the pandemic, you know, played an accelerating role, and
• 2:35
  Speaker 2: it doesn't seem like we have an ability to pull
• 2:37
  Speaker 2: it back. And so we've taken the debt you know,
• 2:40
  Speaker 2: in the last fifteen plus years, kind of since the
• 2:42
  Speaker 2: financial crisis, from seven trillion to thirty eight trillion, and
• 2:47
  Speaker 2: just refinancing it for the rest of the Decade's what's
• 2:50
  Speaker 2: got to be refinanced. If you look at current rates,
• 2:54
  Speaker 2: you know, is going to grow it into the low forties,
• 2:56
  Speaker 2: you know for sure. And we're growing our spending at
• 3:00
  Speaker 2: a reasonable rate still, and so this is an issue
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  Speaker 2: we have to wrestle with now. The path out really
• 3:06
  Speaker 2: isn't a revenue path out. The path out is a
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  Speaker 2: growth path path and you know, if you think about it,
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  Speaker 2: the difference you know, trend growth is two percent. The
• 3:13
  Speaker 2: difference between compound and growth of three percent and two
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  Speaker 2: percent is monstrous in terms of dealing with this issue.
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  Speaker 2: So there's a lot of discussion about running, you know,
• 3:22
  Speaker 2: a real growth play. I think we have some things
• 3:24
  Speaker 2: that are going on that give us a better opportunity
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  Speaker 2: to have a higher growth trajectory, particularly you know, technology
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  Speaker 2: AI getting embedded to the enterprise, the productivity opportunity from that.
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  Speaker 2: But if we continue on the current course and we
• 3:40
  Speaker 2: don't take the growth level up, we will there will
• 3:43
  Speaker 2: be a reckoning in this. And the bottom line is
• 3:46
  Speaker 2: we have to find people, you know, to buy and
• 3:48
  Speaker 2: finance our debt. And you know, ultimately it's it's not
• 3:52
  Speaker 2: going to be other people around the world. If it
• 3:54
  Speaker 2: keeps growing, it's going to turn to us.
• 3:56
  Speaker 1: Is Wall Street worried about the fact that government is
• 3:58
  Speaker 1: shut down? I mean this is for a long shutdown
• 4:01
  Speaker 1: or people on Wall Street saying, well, it don't get
• 4:04
  Speaker 1: started again at some point, or have you seen the
• 4:06
  Speaker 1: adverse impact on your business as a result of the
• 4:08
  Speaker 1: government shutdown.
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  Speaker 2: I think we all should be concerned about the fact
• 4:11
  Speaker 2: that the government shutdown. And I you know, I think
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  Speaker 2: it's unfortunate that we have government shutdowns, and this one's
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  Speaker 2: now going on for a period of time. As it
• 4:19
  Speaker 2: goes on longer, it starts to have an economic impact, right,
• 4:22
  Speaker 2: it starts to filter through the economy. And we're getting
• 4:25
  Speaker 2: you know, we're getting to that point in.
• 4:27
  Speaker 1: This Who do you think the shutoffs were for the
• 4:29
  Speaker 1: shutdown the government? Right, Well, let me ask you. I
• 4:34
  Speaker 1: know you're not going to answer that question. So every
• 4:38
  Speaker 1: seven years on average, and the US economy has had
• 4:40
  Speaker 1: a recession seven year own average. We haven't had a
• 4:43
  Speaker 1: recession for quite a while. Are you worried about any
• 4:47
  Speaker 1: potential recession coming or you think the economy is in
• 4:50
  Speaker 1: pretty good shape?
• 4:51
  Speaker 2: Well, I think the economy is in pretty good shape
• 4:53
  Speaker 2: at the moment. And I think when you look at
• 4:56
  Speaker 2: kind of the give gets, you know, in terms of
• 4:59
  Speaker 2: tailwinds that winds are there are more tailwinds.
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  Speaker 1: At the moment.
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  Speaker 2: I mean, I go back where we're still running a
• 5:04
  Speaker 2: pretty aggressive fiscal you know, fiscal play, the AI infrastructure
• 5:08
  Speaker 2: investment boom you have, you know, you've got six or
• 5:11
  Speaker 2: seven large companies that are going to spend three hundred
• 5:13
  Speaker 2: and fifty billion dollars you know, this year on AI infrastructure.
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  Speaker 2: That has an effect on growth. We also, after a
• 5:19
  Speaker 2: period of kind of heavier regulatory oversight of business broadly,
• 5:25
  Speaker 2: there's now a pretty clear by this administration, a pretty
• 5:28
  Speaker 2: clear systematic look at regulation and you know, more of
• 5:33
  Speaker 2: a view toward what regulation is really necessary and works
• 5:36
  Speaker 2: as effective. And that's you know, that's a tailwind for
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  Speaker 2: growth and so you all and you also have as
• 5:42
  Speaker 2: AI gets embedded into the enterprise, you have real productivity gains.
• 5:45
  Speaker 2: So we've got a big, diverse economy. It's in pretty
• 5:48
  Speaker 2: good shape at the moment. There are things we can't
• 5:51
  Speaker 2: see that could set it off, but I think the
• 5:52
  Speaker 2: chance of a recession and the near term is low.
• 5:55
  Speaker 2: But that's one of the things about sentiment shifts and
• 5:59
  Speaker 2: changes and support. You generally don't see them until they're
• 6:02
  Speaker 2: right in front of you.
• 6:03
  Speaker 1: On AI, some people would say that there's maybe a
• 6:06
  Speaker 1: little bit of a bubble in AI. When you have
• 6:08
  Speaker 1: companies with market caps of five trillion dollars, you don't
• 6:13
  Speaker 1: see any bubble there at all.
• 6:14
  Speaker 2: Whenever we have an acceleration in technology and people get
• 6:18
  Speaker 2: excited about it. You have significant capital formation around new
• 6:23
  Speaker 2: companies that are trying to capitalize on that opportunity. And
• 6:26
  Speaker 2: you know, we've seen this before through history, and you're
• 6:29
  Speaker 2: seeing it, you're seeing it now. It won't be a
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  Speaker 2: straight line. The opportunity set with AI is enormous. There
• 6:37
  Speaker 2: will be winners and losers, and it's hard to pick
• 6:41
  Speaker 2: the winners and losers now. And certainly a lot of
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  Speaker 2: the capital that's being deployed will not produce adequate returns,
• 6:48
  Speaker 2: and a bunch of the capital that's being deployed will actually,
• 6:51
  Speaker 2: you know, will actually not produce any returns.
• 6:53
  Speaker 1: But dollar is down about eleven percent or so against
• 6:56
  Speaker 1: the Euro and some other currencies as well this year.
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  Speaker 2: Yeah year, I mean in the last fifteen years, it's
• 7:02
  Speaker 2: up monstrously.
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  Speaker 1: Right, But did you worry that it's gone down or
• 7:05
  Speaker 1: you think it was overvalued? And as a result of
• 7:08
  Speaker 1: it having gone down, you think the chance of a
• 7:10
  Speaker 1: Plaza core to orchestrated effort to take it down even
• 7:13
  Speaker 1: further is unlikely? And you think the dollar decline now
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  Speaker 1: is okay, it's suggusted appropriately.
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  Speaker 2: You know, the dollar has been on a pretty good
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  Speaker 2: run over a long period of time, and it's certainly
• 7:22
  Speaker 2: given back this year given some of the policy actions,
• 7:25
  Speaker 2: some of the gains. But fundamentally, the dollar is the
• 7:28
  Speaker 2: reserve currency of the world. I don't see anything at
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  Speaker 2: the moment that threatens that. I'm not concerned that there's
• 7:33
  Speaker 2: some fundamental shift. And actually, when you think about digitization
• 7:36
  Speaker 2: and tokenization and access to the dollar, you know, over
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  Speaker 2: time it's actually allowing easier access to the dollar around
• 7:43
  Speaker 2: the world, which in the long run is a benefit
• 7:45
  Speaker 2: for the dollar and the dollar's position in the world.
• 7:46
  Speaker 1: What about crypto? Is crypto now important for Wall Street?
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  Speaker 1: It's an important business? And are you a big believer
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  Speaker 1: in the viability and the good investment opportunities? And related
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  Speaker 1: to crypto.
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  Speaker 2: I'm a big believer in the technology of the blockchain
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  Speaker 2: and the ability for us to change the financial infrastructure
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  Speaker 2: the rails to increase speed and decrease friction, and that's
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  Speaker 2: a very very good thing for the system. That's different
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  Speaker 2: than a debate on the long term value of bitcoin.
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  Speaker 2: I don't have a I think bitcoin looks like a
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  Speaker 2: store of value. I don't have a real long term view,
• 8:21
  Speaker 2: you know, on that a strong long term view, but
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  Speaker 2: I do. I do have a very strong view about tokenization, digitization,
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  Speaker 2: stable coins, and innovation around the whole financial infrastructure. It's coming,
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  Speaker 2: it's coming at a very quick pace, and to the
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  Speaker 2: degree that it increases speed, reduces friction, and allows for
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  Speaker 2: a more secure system, I think that's a very very
• 8:43
  Speaker 2: good thing.
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  Speaker 1: So firms like yours seem to have two main businesses.
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  Speaker 1: I'll say one is investment banking and together is trading,
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  Speaker 1: which is stronger. Right now, investment banking or trading are
• 8:52
  Speaker 1: both doing well.
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  Speaker 2: They're both big, important businesses, and it's evolved a little bit, David,
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  Speaker 2: because the way we run these businesses now we run
• 8:58
  Speaker 2: it as one business global banking and markets, and it's
• 9:01
  Speaker 2: our investment banking, fixed income, currencies and commodities and equities,
• 9:05
  Speaker 2: franchises and the RUE is one business. We've obviously had
• 9:08
  Speaker 2: an extraordinary leadership position in investment banking and M and A,
• 9:12
  Speaker 2: and we've maintained and strengthened that. But in our trading businesses,
• 9:16
  Speaker 2: we've increased our wallet share with our clients over the
• 9:18
  Speaker 2: last five years by three hundred and eighty basis points,
• 9:20
  Speaker 2: and so we've really created an ecosystem by getting these
• 9:23
  Speaker 2: businesses to work together as one. Goldman sachs that our
• 9:26
  Speaker 2: clients really feel like they've benefited from and so we've
• 9:29
  Speaker 2: seen growth in those relatively mature businesses because of that.
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  Speaker 1: When COVID came, a lot of people work by zoom
• 9:35
  Speaker 1: they had to really and then when COVID was over,
• 9:38
  Speaker 1: people were urging their employees to come back to work.
• 9:41
  Speaker 1: And there's still a little bit of a fight on
• 9:43
  Speaker 1: Wall Street about whether people should work in the office
• 9:46
  Speaker 1: five days a week or four days a week. What
• 9:47
  Speaker 1: is your policy.
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  Speaker 2: We don't have a policy. We work. Ours is a
• 9:52
  Speaker 2: culture of teamwork and collaboration and apprenticeship, and that works
• 9:56
  Speaker 2: when people come together. But people also travel to see
• 9:59
  Speaker 2: clients and people all so have busy, complex lives and
• 10:01
  Speaker 2: we have to give them flexibility. We did that before COVID,
• 10:04
  Speaker 2: we do that now. But fundamentally, people show up, they work.
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  Speaker 2: We don't have rules. They get their jobs done, they're accountable,
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  Speaker 2: they're present, and you know, we we come together.
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  Speaker 1: That's what We don't care if they're in the office
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  Speaker 1: five days or three days, as long as a job
• 10:17
  Speaker 1: against done.
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  Speaker 2: As long as as long as they're doing what they
• 10:20
  Speaker 2: need to do. And part of what you need to
• 10:21
  Speaker 2: do is you need to be present, You need to
• 10:22
  Speaker 2: mentor people. By the way, young people, they're coming to
• 10:25
  Speaker 2: Golden Sacks to learn. All these young people we were
• 10:27
  Speaker 2: talking about, they want to be present in the office
• 10:29
  Speaker 2: and they want senior people around them.
• 10:31
  Speaker 1: They want to learn what brings you to Washington other
• 10:33
  Speaker 1: than this event, what you're doing and what what are
• 10:35
  Speaker 1: you doing in Washington today?
• 10:36
  Speaker 2: Principally, fifteen years ago, we created a program at Golden
• 10:39
  Speaker 2: Sacks called ten Thousand Small Businesses. We had a thesis
• 10:44
  Speaker 2: that if we could provide some boot camp business education
• 10:50
  Speaker 2: for small businesses. Given the importance that small businesses play
• 10:54
  Speaker 2: in our economy here in the United States, the entrepreneurial spirit.
• 10:56
  Speaker 2: I think thirty five percent of the private workforce in
• 10:59
  Speaker 2: the United States as small businesses, that if we could
• 11:02
  Speaker 2: make an investment in that community and use our expertise,
• 11:06
  Speaker 2: our knowledge and transmitted into that community, it would spur
• 11:09
  Speaker 2: more investment, more economic growth. A few years ago, we
• 11:12
  Speaker 2: created a platform called ten Thousand Businesses Voices to bring
• 11:16
  Speaker 2: graduates of that program to d C periodically to go
• 11:20
  Speaker 2: up on the hill and spend time with members and
• 11:23
  Speaker 2: senators on policy issues. And so we have two thousand
• 11:26
  Speaker 2: small businesses here. When you think about the power of
• 11:28
  Speaker 2: the US economy, you can't understate how important this entrepreneurial spirit.
• 11:33
  Speaker 2: It's different from other places in the world.
• 11:35
  Speaker 1: Let's talk about your background. Where were you born.
• 11:39
  Speaker 2: I was born in Westchester County, outside New York City,
• 11:42
  Speaker 2: White Pins, White Plains.
• 11:43
  Speaker 1: Name, And what did your parents do.
• 11:45
  Speaker 2: My father had a financial printing business, like mutual fund Perspectuses,
• 11:49
  Speaker 2: and you know Perspectus is in Manhattan, a small financial
• 11:54
  Speaker 2: printing business. He was actually quite smart. He sold it
• 11:57
  Speaker 2: in two thousand to one of the big financial printers
• 12:00
  Speaker 2: that didn't exist after twenty ten. So I think he
• 12:03
  Speaker 2: made I think he made a good trade. My mom
• 12:05
  Speaker 2: was an audiologist at the Berke Rebilitation Hospital in White Plains.
• 12:09
  Speaker 1: And were you a star student when you were in
• 12:11
  Speaker 1: elementary or junior high school or high school?
• 12:13
  Speaker 2: I would not say I was a star student. I
• 12:15
  Speaker 2: would say that I was a distracted student, meaning I
• 12:19
  Speaker 2: have lots of interests, and you know, studying hard was
• 12:23
  Speaker 2: not one of them. There was a point when I
• 12:25
  Speaker 2: really kind of got it when I was in college.
• 12:27
  Speaker 2: But I would say I coasted more through through high school.
• 12:32
  Speaker 1: To an athlete. Were you an athlete?
• 12:34
  Speaker 2: I was. I was an athlete, but I was extremely mediocre,
• 12:36
  Speaker 2: extremely mediocre.
• 12:38
  Speaker 1: I know the feeling. Okay, So, so you went to
• 12:41
  Speaker 1: Hamilton College because you admired Alexander Hamilton or.
• 12:44
  Speaker 2: Well, I went to Hamilton College because I didn't get
• 12:46
  Speaker 2: into Williams.
• 12:48
  Speaker 1: Well, but you're the chair.
• 12:49
  Speaker 2: But Hamilton College is a great school. I'm really glad.
• 12:52
  Speaker 2: I'm really glad that I went there.
• 12:54
  Speaker 1: You're the chair.
• 12:55
  Speaker 2: I've voted the last twenty five years to service there
• 12:58
  Speaker 2: and I do chair the board.
• 12:59
  Speaker 1: Of the board. Now, fantastic enact Congratulations. So are you
• 13:03
  Speaker 1: graduated from Hamilton? What did you major in?
• 13:06
  Speaker 2: I majored in political science and I thought, I really
• 13:09
  Speaker 2: thought I was going to go to law school.
• 13:12
  Speaker 1: And you didn't miss anything, trust me.
• 13:15
  Speaker 2: Well, it was very interesting. You know, all my friends
• 13:19
  Speaker 2: were moving to New York and if you really think
• 13:21
  Speaker 2: about it was nineteen eighty four and the financial services
• 13:25
  Speaker 2: world kind of the bottom of what I would call
• 13:28
  Speaker 2: was a long drag from the late sixties to nineteen
• 13:31
  Speaker 2: eighty two. I mean the moment would be September fifteenth,
• 13:33
  Speaker 2: nineteen eighty two, when the ten year Treasury at fifteen
• 13:36
  Speaker 2: point nine percent. We were just starting to come out
• 13:39
  Speaker 2: of that and see equities start to start to move
• 13:41
  Speaker 2: again in banks and financial firms were creating analyst programs
• 13:45
  Speaker 2: and banks were creating training programs, and all my friends
• 13:49
  Speaker 2: were going to New York to do this. I didn't
• 13:51
  Speaker 2: really know much about finance, but it was an opportunity
• 13:55
  Speaker 2: to kind of continue what we were doing in college
• 13:58
  Speaker 2: in an apartment in New York and where you could
• 14:01
  Speaker 2: earn a salary of twenty two thousand dollars. So I
• 14:03
  Speaker 2: got a job at the Irving Trust Company, which was
• 14:04
  Speaker 2: a commercial bank and a bank training program, and I
• 14:09
  Speaker 2: went to work on Wall Street, actually literally on Wall Street.
• 14:12
  Speaker 2: Irving Trust headquarters was number one Wall Street.
• 14:16
  Speaker 1: Did you interview for a job at Goldman Sacks and
• 14:18
  Speaker 1: get turned down?
• 14:19
  Speaker 2: I didn't interview. I sent a letter asking for an interview,
• 14:21
  Speaker 2: and I got a reply back saying no, thank you.
• 14:23
  Speaker 1: After Irving you went where.
• 14:25
  Speaker 2: Back in those days, generally speaking, if you wanted a
• 14:27
  Speaker 2: career on Wall Street, you had to go to business school.
• 14:29
  Speaker 2: And so in the fall of nineteen eighty five and
• 14:33
  Speaker 2: early nineteen eighty six, I was applying to business school,
• 14:36
  Speaker 2: but I got an interview at Drexel Burnham Lambert in
• 14:38
  Speaker 2: the Hijo bond department and in a small branch of
• 14:41
  Speaker 2: it that was based in New York that basically traded
• 14:44
  Speaker 2: and sold junk commercial paper if you can believe that
• 14:47
  Speaker 2: product existed. And I took that job and went to
• 14:50
  Speaker 2: Drexel burning I had a great experience Atdrexel Burnham. I
• 14:53
  Speaker 2: learned a lot. My background was all around hyo bonds
• 14:56
  Speaker 2: and credit trading.
• 14:57
  Speaker 1: But you left before they went bankrump.
• 14:58
  Speaker 2: I did. I I was competing for a piece of
• 15:01
  Speaker 2: business with a Goldman sax partner's name was John winkel Read.
• 15:06
  Speaker 2: And at the end of competing for that piece of
• 15:08
  Speaker 2: business and actually doing that piece of business, it was
• 15:11
  Speaker 2: actually a financing for Sheldon Adelson, who was building big
• 15:14
  Speaker 2: casino hotels in Las Vegas. We raised them one point
• 15:17
  Speaker 2: two billion dollars. In nineteen ninety eight, I started getting
• 15:21
  Speaker 2: recruited to come to Goldman Sachs and I had been
• 15:23
  Speaker 2: in a pretty senior position at bear Stearns, but I
• 15:26
  Speaker 2: really thought it was an opportunity to go to work
• 15:28
  Speaker 2: for what I believed was, you know, the most extraordinary
• 15:30
  Speaker 2: financial firm on Wall Street.
• 15:32
  Speaker 1: It's very unusual for it my mid to early career
• 15:34
  Speaker 1: to go to Goldman because usually I'd hire people right
• 15:36
  Speaker 1: on business score college and you went kind of as
• 15:38
  Speaker 1: a lateral, and that was unusual. I assumed you had.
• 15:40
  Speaker 2: That at the time. It wasn't unprecedented, but it was.
• 15:44
  Speaker 2: It was unusual. The firm was just going public. I
• 15:46
  Speaker 2: mean I came right after the IPO, and the firm
• 15:49
  Speaker 2: in that year had gone out and hired you know,
• 15:52
  Speaker 2: five or six partners that had real credibility because the
• 15:56
  Speaker 2: firm was trying to grow and expand its footprints.
• 15:58
  Speaker 1: So how many years were you there before where you
• 16:00
  Speaker 1: became the CEO?
• 16:01
  Speaker 2: Well, I became the CEO in twenty eighteen, so that
• 16:03
  Speaker 2: means I was there nineteen years.
• 16:05
  Speaker 1: So work your way up. Did you think when you
• 16:07
  Speaker 1: join you wind up as a CEO?
• 16:08
  Speaker 2: No, I didn't think I would be there for twenty years.
• 16:10
  Speaker 2: I remember there was a partner who was a longtime
• 16:12
  Speaker 2: partner named Bob Hurst who was talking who it was
• 16:17
  Speaker 2: just kind of he was kind of winding down when
• 16:18
  Speaker 2: I joined the firm, and I remember being at an
• 16:21
  Speaker 2: event with clients and he was talking about all the
• 16:23
  Speaker 2: years he had been at the firm, and I remember
• 16:24
  Speaker 2: looking him and saying, well, I'll never make that many years.
• 16:26
  Speaker 1: You became the CEO in October of twenty eighteen. The
• 16:30
  Speaker 1: stock is up roughly three hundred percent since then. The
• 16:33
  Speaker 1: market capitalization's up roughly three hundred percent, So people are
• 16:37
  Speaker 1: pretty happy with you.
• 16:38
  Speaker 2: I assume this week, I mean, you know, so you.
• 16:41
  Speaker 1: Came out with your earnings, because last week your earnings
• 16:45
  Speaker 1: were up per share I guess forty one percent per share,
• 16:48
  Speaker 1: forty six percent, forty six percent over a year of year.
• 16:51
  Speaker 1: But the stock went down two percent. And how can
• 16:53
  Speaker 1: that be given how well you did.
• 16:55
  Speaker 2: I guess they wanted earnings to be up fifty five percent.
• 16:57
  Speaker 2: I mean, you know, we we really don't. I mean
• 17:00
  Speaker 2: it's hard for me because like any human being, you know,
• 17:02
  Speaker 2: I have the screen on my desk or on my phone.
• 17:05
  Speaker 2: But we're really you know, twenty eighteen, when this leadership
• 17:08
  Speaker 2: team started, you know, through twenty eighteen, the end of
• 17:11
  Speaker 2: twenty eighteen to twenty nineteen, we really developed a strategy
• 17:15
  Speaker 2: to grow the firm, and we've made real progress, and
• 17:17
  Speaker 2: we've grown the firm very materially. I mean, the market
• 17:19
  Speaker 2: cap has grown as you highlight because we've grown the revenues.
• 17:22
  Speaker 2: We've not quite doubled the revenues. We've taken the revenues
• 17:25
  Speaker 2: from mid thirties to almost sixty and we've grown the
• 17:27
  Speaker 2: earnings very very materially, and that's grown the market cap.
• 17:31
  Speaker 2: And so we're executing on that strategy. And I think
• 17:34
  Speaker 2: we've got a great strategy, an incredible team. We've got
• 17:37
  Speaker 2: a client. We're incredibly focused on our clients and our
• 17:39
  Speaker 2: client franchise, and you know, the stock will follow. Our
• 17:43
  Speaker 2: job is to execute, to be patient, to take a
• 17:46
  Speaker 2: long view. There will be cycles. At the moment, we're
• 17:48
  Speaker 2: in a constructive cycle, so it feels like there are
• 17:50
  Speaker 2: lots of tailwinds. There'll be more headwinds, but you know,
• 17:53
  Speaker 2: over the next five years, I think we will continue
• 17:55
  Speaker 2: to grow the firm, continue to deliver for our clients,
• 17:58
  Speaker 2: and continue to deliver for shareholders.
• 18:00
  Speaker 1: What percentage of your employees are not men?
• 18:02
  Speaker 2: We've made a bunch of progress, especially in the senior rankspeicendily,
• 18:05
  Speaker 2: not enough and we continue to be focused on creating opportunities,
• 18:08
  Speaker 2: but it's a long, long road.
• 18:10
  Speaker 1: What are the skill sets that enables somebody to rise
• 18:13
  Speaker 1: up at.
• 18:13
  Speaker 2: Goldman Goldman's no different than any other professional services firm.
• 18:17
  Speaker 2: You know, I think one of the things that's important
• 18:20
  Speaker 2: to be successful in a professional services firm is you
• 18:23
  Speaker 2: have to enjoy interacting with people. It's a people business
• 18:27
  Speaker 2: inside the firm because you work collaboratively on teams and
• 18:30
  Speaker 2: you work collectively for the betterment of a group out
• 18:33
  Speaker 2: of the firm. And you have to like working with clients.
• 18:36
  Speaker 2: You have to like serving clients. You have to like
• 18:37
  Speaker 2: responding to clients, you have to like talking to being
• 18:40
  Speaker 2: with building relationships with clients, and so, you know, those
• 18:43
  Speaker 2: are skills that matter. To do those things, you have
• 18:46
  Speaker 2: to have to be smart, you have to be motivated.
• 18:48
  Speaker 2: We have four core values client service, partnership, integrity, and excellence.
• 18:54
  Speaker 2: And you know, all great businesses are underpinned by the
• 18:57
  Speaker 2: leadership in the organization living those values and really trying
• 18:59
  Speaker 2: to peak to the best of their ability to deliver
• 19:01
  Speaker 2: against those values.
• 19:02
  Speaker 1: So it used to be the case you had to
• 19:04
  Speaker 1: be a man to rise up at Wall Street. Today,
• 19:07
  Speaker 1: what percentage of your employees are are not men?
• 19:11
  Speaker 2: We've made a bunch of progress, especially in the senior ranks,
• 19:14
  Speaker 2: picendily not enough, and we continue to be focused on
• 19:17
  Speaker 2: creating opportunities. But it's a long you know, to get
• 19:19
  Speaker 2: to the top of the funnel. It's a it's a long,
• 19:21
  Speaker 2: long road. And you know the sample set. I remember
• 19:23
  Speaker 2: my training class, you know, it was it was ninety ten,
• 19:27
  Speaker 2: you know, men to you know, men to women, you know,
• 19:29
  Speaker 2: forty two years ago.
• 19:30
  Speaker 1: Many people who go to a place like Goldman say
• 19:32
  Speaker 1: that if you want to rise up yet they have
• 19:33
  Speaker 1: an MBA. But you don't have an MBA, And so
• 19:35
  Speaker 1: do you think it's necessary to get an MBA to
• 19:37
  Speaker 1: rise up at Goldman or equivalent firms.
• 19:39
  Speaker 2: I think there was a period, you know, thirty years
• 19:42
  Speaker 2: ago where it really was, you know, the vast majority
• 19:45
  Speaker 2: of people that rose up in the organization did have
• 19:47
  Speaker 2: a business degree. I think that's changed, and the vast
• 19:49
  Speaker 2: majority of people that rise up in the organization do
• 19:51
  Speaker 2: not have a business degree. That doesn't mean that a
• 19:54
  Speaker 2: business degree is not a valuable is not a valuable thing,
• 19:58
  Speaker 2: but the you know, the world's changed. We can train
• 20:00
  Speaker 2: and develop people, you know differently, and you know, real
• 20:03
  Speaker 2: time experience is a valuable thing. And one of the
• 20:05
  Speaker 2: strategic things that the business schools did that I think
• 20:08
  Speaker 2: had an effect. If you go back to when I
• 20:10
  Speaker 2: first started, you worked for two years and you went
• 20:12
  Speaker 2: to business school. The business schools went to a mode
• 20:15
  Speaker 2: where they really wanted people to get four to six
• 20:17
  Speaker 2: years or seven years of experience, and so they kind
• 20:20
  Speaker 2: of wound up with people went to business school more
• 20:23
  Speaker 2: to career change, not to career continue, because if you
• 20:26
  Speaker 2: were if you worked in finance for four or five years,
• 20:29
  Speaker 2: you had learned a whole bunch of things real time
• 20:31
  Speaker 2: on the job, where the value proposition you know, for
• 20:35
  Speaker 2: going to business school wasn't the same as it was
• 20:37
  Speaker 2: if you were only two years in.
• 20:38
  Speaker 1: And if somebody is watching here and you want to
• 20:41
  Speaker 1: summarize what you wish somebody would know about Goldman Sachs,
• 20:44
  Speaker 1: what would it be.
• 20:45
  Speaker 2: It's filled with extraordinary people that are just zealously focused
• 20:48
  Speaker 2: on doing the best we can to serve our clients,
• 20:51
  Speaker 2: to build trust, to take a long term view, to
• 20:53
  Speaker 2: do the right thing, and really have the most be
• 20:56
  Speaker 2: a part of and steward what I believe is the
• 20:59
  Speaker 2: most extraordinary, very financial institution in the world, and to
• 21:01
  Speaker 2: try to make it stronger, better than we found it.
• 21:04
  Speaker 1: And your biggest worry today about what's going on in
• 21:06
  Speaker 1: the world or the economy. Is there any one worry
• 21:09
  Speaker 1: you're worried about.
• 21:10
  Speaker 2: Or there are always risks, There are always things to
• 21:12
  Speaker 2: worry about. We're constantly looking at our processes, looking at
• 21:15
  Speaker 2: our risk, thinking about what can go wrong. And the
• 21:18
  Speaker 2: reason for that is not because things aren't going to
• 21:20
  Speaker 2: go wrong. Things will go wrong. What defines a financial
• 21:24
  Speaker 2: institution when things go wrong is how the institution responds
• 21:27
  Speaker 2: to it. You know, we are zealously focused on that
• 21:30
  Speaker 2: because I guarantee things will go wrong. They always do.
• 21:34
  Speaker 2: Environments change, bumps come. Risk is risk, and when you
• 21:38
  Speaker 2: take risk, you know you have periods of time when
• 21:40
  Speaker 2: you lose money or it's hard to make money. And
• 21:42
  Speaker 2: what defines organizations is how they respond when things are tough,
• 21:45
  Speaker 2: not how they respond when things are easy.
• 21:47
  Speaker 1: Can you go out to dinner in New York without
• 21:48
  Speaker 1: somebody saying, here's a resume or here's a deal.
• 21:52
  Speaker 2: The greatest it's a privilege, and there's pleasure that comes
• 21:56
  Speaker 2: with it. The greatest privilege is stewarding this firm is
• 22:00
  Speaker 2: is the people that you get to work with that
• 22:02
  Speaker 2: the firm is filled with the most extraordinary people that
• 22:05
  Speaker 2: work so incredibly hard. You know, day in and day
• 22:08
  Speaker 2: out to serve our clients. They're smart, they're motivated, and
• 22:12
  Speaker 2: it's it's it's incredible to work with them, to be
• 22:14
  Speaker 2: with them, and then also our clients and the opportunity.
• 22:17
  Speaker 1: To particularly the private equity clients, the private.
• 22:20
  Speaker 2: Equity clients, and it avouves the private equity clients. But
• 22:23
  Speaker 2: the I mean, it's just it's it's the most enjoyable
• 22:26
  Speaker 2: thing about the business is people and the ability to
• 22:29
  Speaker 2: to learn and to be with people and be motivated
• 22:33
  Speaker 2: by people and stimulated by people. It's it's it's really extraordinary.
• 22:36
  Speaker 1: Thanks for listening to hear more of my interviews. You
• 22:39
  Speaker 1: can subscribe and download my podcast on Spotify, Apple, or
• 22:43
  Speaker 1: wherever you listen.