Business

Fewer stars to rise on Goldman Sachs as Partnership Class shrinks




The Wall Street firm is set to name its smallest class of new partners this year this week, according to people familiar with the case. It is the first department of campaigns under CEO David Solomon, which aims to keep Goldman's top ranger exclusive and compensate for a recent influx of rentals.

Fewer than 65 people will probably get a nod, the people said. That would be the smallest class since 1998, when Goldman was still a private company, and fewer than the 84 promoted two years ago.

Being a Goldman partner meant once to bind one's personal fortune to the company. From its founding in 1869 to its original public offer in 1999, Goldman's partners financed their balances and shared profits and losses.

Today, the title of mainly symbolic partners owns less than 5% of the company ̵[ads1]1; but each other's year's selection process remains a central part of Goldman's identity, a way to reward and motivate employees to and maintain the company's culture.

Candidates are discovered by a group of senior executives – a process known internally as "cross rolling", a loan borrowed from a bridge – but is not interviewed itself. If selected, they can expect to hear personal information personally from Goldman's CEO.

Herr. Solomon told leaders to be extra selective this year, people said close to the process. Few people were considered and there has been less of last-minute lobbying that has padded the final list in recent years, the people said.

Herr. Salomon, who took over as CEO one month ago, aims to maintain the partnership's ambitions, avoid irrigation of Goldman's overall rankings, and concentrate power among those who are able to do business. The partnership has increased from 221 at the time of listing to approx. 435 today.

Also clamps the size of this year's class: More than a dozen outsiders have joined the company as partners in the past year. It is unusual for Goldman, which tends to promote from within, and has produced grumbles from existing employees whose words have spread across a smaller 2018 class.

Partners represent just over 1% of Goldman's employees and earn a minimum salary of around $ 1 million, with bonuses that may be multiple times and access to fixed investment funds.

They are Responsible for Protecting the Company's Culture and Reputation – a responsibility that gained importance after former Goldman partner Timothy Leissnerpleaded owed last week for his role in a fraud that siphoned billions of dollars from 1Malaysia Development Bhd, or 1MDB, Malaysian sovereignty fund.

About one third of Goldman partners are investment bankers and a quarter are traders or securities traders, according to a Wall Street Journal analysis. Fourteen were already partners when Goldman was published in 1999, made fabulously wealthy at the listing. Two thirds have been promoted since 2008 and have come up in a slimmer environment.

Only 15% are women, and they are twice as represented in back-office roles as operations and human resources than in commerce or banking. Raising this number is a priority for Mr. Solomon, a father of two daughters who have set a target of gender parity in Goldman's junior rankings by 2021.

Mr.. Salomon, a former investment banker, has allocated fewer cooperative places for support functions, The Wall Street Journal reported earlier this year. Following the financial crisis, Goldman fought heavily from its legal, compliance and control departments, in part to show regulators that it took serious lessons from 2008. Seven Goldman attorneys are partners.

Write to Liz Hoffman at liz.hoffman@wsj.com



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