Goldman Sachs Promotion Executives This Year at Lowest in 20 Years

'Non-mainstream' Women and People of Color Show Remarkable Progress

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The number of executive promotions at the U.S. investment bank Goldman Sachs has hit a 20-year low. This was largely due to reduced bonuses at Wall Street financial firms following the global financial crisis. However, the firm increased the proportion of promotions for women and people of color, reflecting efforts by one of Wall Street's most conservative companies to pursue diversity.

According to the Wall Street Journal (WSJ) on the 12th (local time), Goldman Sachs announced the promotion of 60 employees to executives. WSJ reported, "CEO David Solomon has made efforts to somewhat restore the prestige of Wall Street's largest elite club," adding that this is "the smallest scale in 20 years."

When Goldman Sachs went public, it used to appoint as many as 500 executives annually, but due to complaints from senior executives about the standards being too low and the need to share bonuses, the scale of promotions was drastically reduced.

Instead of increasing the number of executive promotions, Goldman Sachs pursued diversity in terms of race and gender. Accordingly, 16 female employees were promoted to executives. This accounts for 27% of this year's partner promotions, the highest level ever. WSJ described this as "a sign of CEO Solomon's commitment to reducing gender discrimination at Goldman Sachs."

Goldman Sachs, which was particularly conservative even on Wall Street, promoting women and minorities to the mainstream stage is seen as symbolic. Earlier, JP Morgan started the trend by promoting a record 30 women (26%) to executives this year. In September, Citibank, one of the three major U.S. banks, appointed Jane Fraser as CEO, marking a milestone for women.

The background of Goldman Sachs' personnel decisions is also related to this trend. Goldman Sachs aims to fill half of its new hires, including analysts, with women. CEO Solomon stated, "We will increase the number of women in senior positions in the male-dominated trading and advisory divisions," adding, "Companies that have had at least one female director among those that went public in the past four years have performed quite well."

There is also an interpretation that the expectation of women and minorities advancing under the Biden administration, which will take office in January next year, influenced Goldman Sachs' executive promotions.

The advancement of people of color, including Black individuals, was also notable. Goldman Sachs introduced that 30% of the new executives are people of color such as Asians. As a result, the influence of white men has decreased. Among this year's executive promotions, 32 were white men, the lowest level ever. The proportion of white men among promoted executives has gradually decreased from 71% in 2018 to 66% in 2019, and 53% this year.

Although the number of executive promotions decreased, the benefits they enjoy have increased. Starting this year, Goldman Sachs executives will receive performance compensation for private equity funds. While employee salaries at Goldman Sachs have declined since the 2008 financial crisis, executives are guaranteed an annual salary of $1 million.

This content was produced with the assistance of AI translation services.