Benioff’s Moves, Goldman Questions & a Disney Activist Post-Mortem

Goldman C.E.O. David Solomon responded to pointed questions about the firm decade-long, unprofitiable foray into consumer banking at last week’s investor conference.
At last week’s investor conference, Goldman C.E.O. David Solomon responded to pointed questions about the firm’s decade-long, unprofitable foray into consumer banking. Photo: Michael Kovac/Getty Images
William D. Cohan
March 5, 2023

Running Goldman Sachs is not an easy job, especially these days. As C.E.O. David Solomon noted repeatedly during last week’s investor conference the last three years have been anything but normal—the global bank is still dealing with the after-effects of a global pandemic, a complicated new interest rate environment, the reality of a wildly profitable 2021 followed by a far more challenging 2022, and the continued leaks about the unrest at the firm, especially among a subset of seemingly miffed partners. 

That tension was very much on display during the afternoon question-and-answer period, when the Wells Fargo research analyst Mike Mayo got under Solomon’s skin a bit. Mayo’s beef, it seemed, was that Solomon ostensibly avoided answering a question that many yearned to know about: When would Goldman jettison its nearly decade-long, unprofitable effort to delve into consumer banking, with Marcus and with its Apple and GM credit-card affiliations, as well as its cash-management businesses? 

In his question to David, Mayo described Goldman’s businesses as “the good, the bad, and the ugly,” an obvious reference to the 1966 Clint Eastwood classic spaghetti western of the same name. The “good,” according to Mayo, referred to Goldman’s investment banking and trading businesses, which comprises 70 percent of the firm. “I get it,” Mayo said. The “bad,” in Mayo land, at least, was Goldman’s asset and wealth management businesses. (“What took you so long to bring down those on-balance sheet investments, which are a drag on capital and a drag on your [return-on-equity]?” he asked.) And then there was Mayo’s view of the “ugly”: Goldman’s so-called “Platform Solutions,” or consumer businesses, the aforementioned credit card and Marcus efforts. “Why don’t you just call it a day with point-of-sale financing and the credit card relationships [and] merge the transaction banking with [Goldman’s investment banking and trading division] and just get beyond this stage?” Mayo wondered.