This is it just Goldman Sachs, when we discuss developments currently, shipping markets industries in the global economy, objects, Ewart Global, had of corporate communications here at the firm, today we're sitting down with our Seo David Solomon October. First marks one you since David has been leaning. Goldman Sachs, though, is better the firm for twenty years and we'll talk about that block. It took about what has been up to over the past year and his top priorities for a year to seal and will ask about what does outside the offices. Well see, can look forward to that David welcomed the programme thanks logic, happy to be here again, you ve, been see over just about a year now bring us back to October, one last year, your first official day. What was it like? Waking up that morning then going to work? I think the exciting thing about waking up that morning cup. A beautiful sunny, southern California. I spent my first day.

As ceo at the fortune, most powerful woman summit, which was really a great way to start. My tenure allow me to put an emphasis on something. It's really important to me, which is diversity, inclusion, Goldman Sachs and so that's an event The firm has been a failure with for a long time, Lloyd would attend on an end basis through a privilege to attain their very men, the common have the opportunity to talk to this group of women leaders from all over the country of the world. Actually, in fact- and it was just a great way to start so- it wasn't walking into building like the first day was still work, but it was. There was a historic, but I started with something which is very uplifting very exciting You know you're often running. I think one of the things that just so interesting about it is you kind of ebbed into it. I guess you're different transitions for different people. I think there were stages of my transition, the first stage When Lloyd pulled me aside in March of that, and said european

YO and I'm gonna make a statement about that. But there is no time in Place the next step in that process was one Lloyd, publicly announced that I would be the CEO and October first which, if it came in July and actual that was last July and on that point the water runs down hill and it starts very quickly. So, by the time we got talked over first, we were into it. We were looking at it was exciting, because there is a lot to do, but it didn't feel like a different day. It was a little bit more gradual position more deserves a lot of credit for that. He manage that. He allowed me to have some time to kind of think about some things that we wanted to do and it didn't feel me no one day on one day off the felt like we kind of transition into it and start a very worthy y know he didn't have the same luxury, but those were different circumstances when he took the job. They were different circumstances. Maybe that's why he did it that way, because they were different circumstances. I remember his transition when Hank basically called him

Sunday for day we weekend in two thousand and six and said he was going to go to the treasury secretary and by Tuesday. Lloyd, was chalk, revolvers, hag was gone and we're partner meeting that weaken Chicago and we were often running, and so this was different. a more thoughtful transition to my benefit, I think candidate affirms benefit what was the transition like? What was the biggest surprise? The first thing that idea A lot of advice on is really thinking about what I thought was important me to do for me to say, as I was moving into this job- and I thought about some themes- are some things that I just like: a quarter. Goldman Sachs You go about. Sex is very, very rooted in the work we do for clients its root in the people that we have at Goldman Sachs. At supporter activities, you know with clients, and so I thought it was important to try to talk about or create some initiatives that set the tone for. Were I wanted the firm to her

In particular, I've been very, very focused on making sure that our client focus is at the centre of everything. We do and that we really work with our clients as one farm divisional farm? We ve always been a divisional firm, but I think is a great opportunity to make sure for our clients were delivering the whole. and so very early. We created, if you remember, on that same first day, October, first we put out a memo on across divisional client initiative, a pilot which really The message out that we wanted to, for our biggest most important clients, really think about These are people who are using all the different divisions of the firm how we face them, how we make sure we're thinking about their experience with golden sex with their eyes instead of through the structure we set up, and so one of my key messages was the clients interests at the farm, and I wanted to be very focused on that. Second, we have

great businesses, great businesses that have been core to the farm for a long time and investment, banking and sales and trading and asset management. As an investor, we have a fabulous ultra high net worth wealth management, business, those businesses, a terrific, their opportunities and all those businesses. But it was very clear to me that, given the change over the last decade from a structural and regulatory perspective and our industry, we had to broaden and diversify our business and so was very important, get working on a strategy, a plan to add businesses and add areas of focus, and we immediately started to look at it through the lens of our clients. And so you heard talk about this. We have really three principal groups of clients, garments and corporations, institutions and individuals.

We wanted to think about the strategy going forward and how we could add products and services that were differentiated for those different client groups and self corporates. There is the opportunity to do other things that banks have traditionally done that we have been in, but for individuals There was a very, very open field because we ve had very very little of a consumer focus, but we ve been starting to build that, and so we ve been really focused in this first year on figuring out where we want to take the floor. In the medium term to really solidify the firms competitive position as a law large global financial institution. I feel good about the progress we are making an excited about the fact that were to talk more about it in the coming months, as we before doing If you only the strategy now, what's ahead, as you think about strategy, you been focused out of three year, we ve promised investors and update early next year. What ahead, I think people are getting to take the where we're going we're talking about adding more durable, recurring fee based revenue to the mix,

you, ve seen us consolidate or investing businesses onto won broad platform, which should over time, allow us to increase the amount of money we manage for clients on a global basis across a very, very diverse alternatives. Investing form. We continue to be focused on growing or wealth management business. As I said, we ve always had an excellent ultra high net worth private wealth business, but we have the asset management infrastructure to support a much broader platform and through echo, and the first acquisition we ve made united Capital were expanding, echoes a channel use corporations. The plot warm to attract wolf management, clients and we're very excited about that. Any opportunity there were starting to do through our digital platforms in the digital applications. Where you see the credit card and Marcus were starting to find ways to bring in everyday Americans bees restarting here in the: U S, I love management platform- that's a pretty good list already is talking about strata.

You talk about diversity, turnabout Clyde centrally. What does something the priorities for you in your first year and what you think you ve accomplished so far, one of the things that I think is very important when you're you're running a business of this size scale as you have to have a plan and that's kind. New for this organisation. This organization has always been very adaptive. It's always been very flex. The boys had, I been nimble, we voiced automobile nimble given the way the world of evolved. If you really go back and think about this, when I joined the firm, the firm was just going- probably just becoming a public company twenty years ago and was really quite small. It was a small private car a ship and over a very short period of time and the overall scheme of things it's become a fortune. Fifty company, and in the context of that, as you, look forward with a much bigger capital base and a much larger business in order to grow the business and continue to drive returns for our shareholders, we have to make investments and we have to have a plan with

back to how we can add to the business- and this is new for the organization, so one of the things I really wanted to do as I wanted to build that plan, I wanted to start to get the broad leadership of the partnership to embrace the direction were going and candidly to really sign up to be a part of driving this plan, which we can take a lot of work. Ex three to five years and so there's a natural process, as you do, that of really figuring out is the broad leadership in place. Is the broad leadership with the organization and really saying to people hey. This is war going. This is what we're gonna do want you to be a part of it. I want you to be energized by it and you know, signed be a bore, but hey? This is a commitment, this thing to happen in twelve months. This is a multi year commitment and so that's been a process doing a new process for people. The firm, because we haven't traditionally done that that process has inevitably lead to some leadership, changes that were flurry when you started and there's been a flurry more recently, as you hit your one, the press not to beat up autumn, I love them all, but

never be over, interprets some of those or misinterprets. We could say how do you think about the leadership changes that are underway while a couple of things that are going on. You know, first this process of, say here's, what we're doing for the next five years. Let's be a part of, it naturally has shaken out some people that are like you know. I've been at this for a long time. I don't think I want to sign up for another five years and that's a natural part of a process like this during transition, we ve also is a leadership team, but very focused on trying to create opportunities for younger partners or up and coming leaders in the partnership to step up, have bigger roles in autumn forward and we're trying to unlock some of their talent that I think, is deeply embedded in the partnership and try to pull some people up in the organization, and so that's created a little bit a change. In addition, I

one of the things a very healthy for an organisation is to move people around two different places and so try to move the people around to give some people that we think that the potential to be broad leaders across the organization, war experiences and candidly one of the first thing I did. I took that hammock out of securities and I made her I share the farm. We took Stephanie Coronet investment banking. We made her the chief strategy officer and we continue to take people from around the organization and put them other jobs where they can broaden their skill, set, Seymour Understanding, organisation more broadly and therefore have the potential for bigger leadership jobs over time. So all that stuff, with all that, going on again to your point that the stories always the story and it's gonna, sell the facts. The facts are that we run a part ship that runs into your cycles and there's nothing about the attrition in the partnership. Up to this Wait in the cycle when, as you know, our were nine months into a two month cycle, but it looks absolutely the same

running on track towards looks like another cycles, and so, despite the fact that I understand why, because urban, a handful more senior people, maybe who have opted out or a couple of senior changes, it creates intellect buzzing. Rest, but the reality of it is work, through the normal transition that we ve gone through for the last five or six partner cycles, and so it is not surprising that were going at approximately the same pace now. At the same time, we'd like to try to tighten up the partnership and really make sure we ve got his tide of partnership as we can, because we think that the best thing to keeping it operational and really keeping. It is something that really drives the organization, and so you saws last time make a smaller class in you probably see that going forward, but there still gonna be four hundred plus Partners Goldman Sachs. It's all the margin, it's all proactive management at the margin to try to get the best result for the farm and therefore

where our shareholders, because that's leadership and the firm is also three thousand people work. The firm and now looking to you every day and serve wondering what you're doing you're saying how do you manage that? Had you engage with the broader cross section of the employees all around the world, the whole leadership spending a lot of time and I've spent a bunch and my first year getting around the world and talking to people in one of the issues: seeing things about. The job is pick any city that you travel to. You can see clients and you can see people from Goldman Sachs and almost any city almost any place. You go in the world, and so in the context of that, there have been opportunities to see Goldman Sachs people one on one there, but opportunities for town all their property these four small round table meetings, but I'm a big believer that investing the time to talk to people to communicate with people to get people an opportunity interact with you all good. For the firm, all good for the

messages in the direction we tried to you not to go in to permeate through the organization, and so I ve spent a lot of time in the first you're doing it. So is John, so Stephen. So as other management committee leaders across the farm and my expectation is well spent, more in the next year doing the same thing: yeah you've also opened up. This may be obscure to people outside the firm, but the earnings presentation used to be just a managing directors, and now it's available to everyone in the firm had you think about Well, I'm a big believer with talked about this, a lot of other believer in transparency and we're trying to make for more transparent. We try to make them more transparent inside the firm and we're trying to make for more transparent outside the farm and we serve our shareholders. We serve all stakeholders, but for sure we serve our shareholders. Earnings is a very important thing that occurs four times a year and I thought it was important to give all our people

access to that information directly real time. There's no reason why they shouldn't here would Stephen stands up and goes through the financials. What he's saying when Heather stands up and talks about how investors are thinking about the firm? What does she saying? I usually speak? You know what those earnings calls meetings in me. I wanna people they hear directly from an there's, no the filter it I'd like it to be out there. So we decided that was an easy way to open up communications and, as an organization be more transparent, and this year we're celebrating two hundred and fifty thousand versuri so I'll bring the history the her. How do you think about a culture that made the firm so unique on the last two hundred fifty years and had he think about it, going forward its humbling candidly to reflect upon the hundred and fiftieth birthday of the firm under fifty event of our three of the farm darnel on companies that make it a hundred and fifty years under any circumstances, the very special thing, and so I think.

It's good to a kind of think about. What is it that allowed this company on, like so many others too? Not just survive but thrive for such a long parry the time and how do we strengthen the things that have allowed that and add new things that give us a better chance of perpetuating a position? of strikes going forward and so on other big believer that no company can stay the same. Everyone to evolve. Everyone has to change. The world is very, very dynamic and we have some real cultural pillars, but I think support our organization are focused on. Clients are focused on our people, the quality of our people. A real focus on excellence in everything we do collaboration work is a team. These are foundational for the farm, but in addition, I think we have to be open

flexible and willing to change in a world that is coming at us and all different directions, and so I think the key is to keep the Cultural Foundation really solid, but be open to doing things differently, so that you can keep the farmer forward. You ve been see offer a year. You been in senior management longer I've been at the firm we ve been going. For twenty years and yet still sometimes get referred to, maybe not your face, but as a lateral high because happen of work somewhere else. Has you experience in other places, inform your views of Goldman in its own everybody's our journey I'll just start by saying. I'm still my facebook What is sometimes around these howled holes, but my career as a journey, I'm thirty six years into it and I've learned along the way, and I think I'm better I've been better throughout my career Goldman Sachs piece of experiences I had other places There were some experiences that excellent nowhere. Some experiences that warrant is good, but one thing for sure

is having worked other places when I came to Goldman Sachs twenty years ago, I could We look at this organisation and I can appreciate the things about this organization that made it special. Because I ve been on other organizations candidly worn especial. You know. We talk about diversity, Tibet, diversity, ideas, diversity of perspectives. If you ve only worked at one place in Europe, if you dont, have the same diversity of ideas of perspectives as if you worked at a handful places and I'd feel fortunate that I've worked at a handful places and looked years, long time to work any place. So call me lateral, but I think I'm pretty Michael. I don't follow up bleeding Goldman Sachs at this point. We talk with our clients, but how technologies disrupting their industries and their companies how do you think about Goldman in terms of its evolution as it responds to technological disruption, the financial industry and how it is

for our kids, or you know, we're we're making significant investment in technology, both upgrading platforms and technology. We have existing business, but also building new platforms and new applications and allow us to be more effective with clients. At point of the credit card which the first credit card platform to be built in a long time. I talk about Marquis, which is getting more visibility, but it's a very, very interesting thing. These people talk about technology companies. They attach that monaker for certain kinds of businesses, and I would just say what business today exists, but scale that doesn't use technology to better deliver its products and services. The better connect with its clients are customers to empower enable its employees to be more effective. It just cord every business right now. We have at the firm, you know more than twenty five percent of people work. Your engineers there's a lot.

That's going on from a technology perspective? When I think about the firm at a high level, we have people, we have technology, we have capital and capitals a commodity, but our ability to use our people to marry really great people on great fought with fantastic tick. Ology will make us more effective for our clients, and so it's a big big focus now putting that aside, which I think is core to what we're trying to do when you look at the world, you look at our world. Our businesses are changing because the technology you look at ourselves, and trading businesses. There is much more that is done on platforms or through me. means or where data site tis used. Then, twenty years ago, a much more over the counter, but spoke person to person business and now that still exists, and I think one of the things that, as an organisation we still excel at, is bespoke risking a mediation, and I think we got excellent risk management. Culture

capital committing capabilities across this organization globally. That, I think, is second to none. At the same point, where that business is being done through machines and through platforms on its are responsibility We want to be a leader in that business to have the best platforms that offer the most flexible. Did our clients and the best tools for our clients. Arclight can be more effective and so we're going cast on them. We're taking this year. In the middle of climate weekend, you recently signed onto an effort with major Bloomberg around that to bring more business people together in the effort you also I, the firm, pulled together a new group that will the firm look at sustainability in a more business. Like way, what led That decision what he hoped to accomplish their- I think these are really important issues in their important issues, not just because the right thing for us to focus on their important issues, be they affect our business

and so when I think about the medium and long term performance of our business, if we don't get it right on a whole variety of topics that are sustainability, effort is focused on it will be to the detriment of golden acts and ultimately to the detriment of our shareholders of the environment is just one part of that focus. But The sustainability of our free market system and the system We really believe in the toy brought people along Pew and around the world we need to participate in making sure were investing and things that make the system work that make the environment work for all people, and if you do that, it takes costing fortune out of our business and so its super important that we think about these things. But we do it because we think it's right for business and we also duping we think it's right, but it starts with our vote. On what do we need to make our business as competitive as well position as possible in the medium and long term? How do you think about working with other companies and other stakeholders on those issues? Happy about

There are lots of opportunities to partner with people, and there are a number of examples were partner with some of our clients. This is a topic that work It's a really engaged in, and we know different. If you move around the world. The need, for example, in Europe, is an enormous amount. Engagement around the environment right now, an enormous amount, our clients, my partner with us. Our clients are looking for opportunities for us to create it. lasting capital sources that in some way shape or form allow the move towards be more carbon neutral over time, its effect a focus of companies all of the world, and so there is a real opportunity for us to innovate around financial tools and support our clients and I'd, say our clients are really engage on this topic, you're looking for new and creative ideas, and we ve got a few that we ve been working on a few that we put up marketplace. What are things that I'll have attention? The summit was the launch of the partnership between common Saxon apple on credit. How do they come about? How does that tie into how you thinking about serving more mainstream customers, while at the most base level it came about?

Apple decided. They wanted to be in the credit card business. They wanted to use their platform for other products and services and they decided they wanted to be in financial services to some degree. They started with a credit Art is something they wanted to do. They did not want to jump inside the financial, regulatory motor undeniable reason for understandable reasons, and so they basically said we're gonna go out and do a credit card use our platform to build. I would think of variety reasons why it's good for us, and so they went out and talk to her. Banks, and we were one of the banks that they talk to sew. It started with a fact: they were not talked everybody we, I think, some interesting advantages in that process. Of which was. We had a very nascent consumer business that was digitally oriented, but we had legacy business, and so they very specific things that they wanted to build. Terms of the application of these are ability in the phone and the ability to make things easier for consumers broadly, and we had greater

stability is we weren't married to an existing platform or existing tools or historical respect, on how these all work together, and so I think that proved to be an advantage that we could take our white piece of paper and Ok, you wanted design of this way are we think we can design it this way, I think the sex is apple, has been a really relationship here at the farm for twenty five plus years and in the context of that, innovations knew each other? Well, there was a lot of trust that trust, I think, was important when you enter into a partnership like this, because they're going to be bumps and things are going to go perfectly but history that we had to organizations. I trust that was their enabled us to kind of embark on this project, and early launch in the early read as its were off to a good start so we are living through interesting times, geopolitics, her back in the forefront of investors, minds markets have been both fixed income and equity markets in a little jumpy,

recently kinds rose coming to you and asking you for our view. The macro picture, how you describing that clients these days well, there's a locker on the world at the moment. Economically, the you economy is doing fine and actual Santa relative basis, the? U S economy, is doing better than the relative as you get around the world. I think in particular, There's been a real slow down in Europe, particularly in strong economy and even here slow down in the industrial economy, there's a slow down in capital spending and capital investment. Given some of the uncertainty that exists around the world, the consumer in the. U S, a stone, pretty good shape, the consumer's big, the economy here- and I think the economic picture here- is ok but its fragile the trade situation and more broadly our relationship with China, which is evolving and fragile, and that is affecting confidence when you

look what's going on politically and places around Europe. If you look, for example, what's going on in Germany that raising questions is there are we going through transition there? And so there is no question that there is a little bit of uncertainty around the world right and that ways on investors. That said, who s things are going. Ok, but there's a bunch to watch to think about to worry We very concerned about monetary power. See and how its evolved over the course of the last decade. I think negative interest rates is failed. Burma there can be real consequences repercussions of that everyone in the world, but in particular, for those places were negative. Interest rates have existed I think it's inflated asset prices around the world and I think that something that should be of concern at some in time, and so without I run, I think to be cautious, but at the moment, if you look at the facts and we call the short term

kind of his children alone. Ok, her in the! U s: you're, just washing, had washing had a chance to talk about some these issues with policymakers there and there were lot lot of other business leaders in town, USSR. The australian parliament sir, what was on people's minds there? What's the mood like we were very very fast than China, trade and the relationship between the Wasn't China and people are in the sky? log about as it can be a deal is going be a big deal. It can be a small d on I'm not smile, up to now. If there's gonna be a deal, but I think it is a fundamental change in the who China relationship and, I think, Evolution of that change and getting too end of the road is not something is going to happen with a simple trade deal like this is big, change in the way the EU China position than the world an weren't, navigating some very, very big, complicated issues, and I think this can be process over a period of time, and I think people feel uncertainty about that now. Looking for answers,

and I think this is one of those things where there's not obvious answer is this will be a process over a period of time and it's complicated, and I am concerned about the fact that it seems like because of the way this process is unfolded, wording I've been kind of it If your world is the, U Dot S aligned economic world in the China lined economic role than I think. That's going to create issues of friction. You know when global growth I'm depending on our progressive. So that was a big topic. The discussion on monetary policy. Around negative rates can third, about growing government debt around the world concern about deficits, which is something to watch carefully. Lot of discussion about the role of companies, verses government around complex, difficult issues that tricky topic. That gets a lot of attention that the companies are going to continue to invest in their people their commute. these are things that matter some of the things we were talking about before, but to make progress on some of these difficult issues. We need the lead later. We need Democrats and Republicans to come together.

legislate. We need both to make progress. That's a lot hopeful. in this way the election next year. So we ll see about away the election next year was a big topping evidently about everybody wants talk about the election only they knew it was gonna happen. What's your top focus for next year, for you for year, two Goldman Sachs. The big thing that we as a leadership team and am very very personally focus on is the roll out of our broader strategy and further. Execution on a bunch of the initiatives that we ve. located somewhere that we will communicate as we move forward. We ve got a few big things that have to be executed on we Now we're building a transaction services platform were now on that transaction services platform for ourselves, was unwilling to roll out the clients in the first quarter of twenty twenty we bought United. Capital and we're integrated. We need to integrate it and see the benefits of that acquisition and make progress on that. In twenty twenty, we launched a credit card

which has been out there for a few months. But now we actually need to build a grow. It make it work, and we need to execute on that in the year. Twenty twenty and we announced The point, together of our investment platforms around the firm daddy, we're centralized merchant banking division and tooth a broader plan across equity, both private equity, growth, equity across credit across real estate, cross infrastructure, to grow are platforms, your work more with our clients and a more strategic basis, and so we need to execute on that too. That's a lot of excess should that we're gonna be really focused on during twenty twenty seven year always a busy troika visit less close, copper, quick questions. Well known that you do some dj. Other side prepared a scale that back a bit with all your day, job obligations, but talk briefly about what having an outside interests like that means to you

why it's important. First, why really enjoy it? I love music, I've really lucky enough to find kind of a passion or a hobby. That really takes me away from what I'm doing twenty four seven most of the time Where are the music studio or what I'm actually the hand four times a year, that I do it publicly and a club and actually really de Jane you're lost and what you're doing and I'm a guy who's running, running running running with a lot going out of my head, really the Goldman Sachs every single day, and when I go do this just queers my head. A little bit gets me away from it and I think it's healthy recharge is me, and so I enjoyed is a hobby and work on the weekends. You know it takes me away but in some degree I pike exercise, I rode by collecting the gym, etc. That clears my, the different way, but when I'm doing those thanks a lot of the time I'm thinking about work and think about Goldman Sachs, and so this is a dick, kind of escape, so to speak. I think, just gives me more energy to keep going We join keep doing it

every year. We hire lots and lots of young people they're starting out their careers. What advice to you give to young people when they come to you and are lucky enough yet audience and say hey. How should I be thinking about my career, whether Goldman Sachs or somewhere else? thing that I try to encourage people to do a little bit more then I think I see young doing today is be in the moment and live and learn, and do not be so worried about what's next, I have a lot of it come to me while doing this, what should I do next? I do this next. I do this next and today as a basic questions like what you doing. Are you learning you like the people you working with you like the people you working for? If those things are caught up quickly working, keep going, don't worry so much about. What's next I always found in my career opportunities, kept popping up over time actually the more. I stayed in one place and die a little bit more got a little bit more invested in what I was doing, the more the case,

many of the opportunities, the popped up kind of accelerated so I'm a big believer that it's a long road what we said earlier, I've been at it. Thirty, five, thirty six years, I've still got a lot to do energy? So it's a long road and you just have to have the answer. You don't have no the destination. You just have to be making progress and progress, learning meeting people enjoy you're doing having a good experience you dont have to know. What's next, you don't have to have the final destination, or I will deal with that. Good advice thanks for joining us today, thanks Jake, so that Clearly, this episode exchanged Goldman Sachs thanks for listening and if he enjoyed the show, we hope you subscribe and Apple podcast, leave a rating or a comment and for more from Goldman Sachs experts, as well as influential policymakers, academics and investors on market moving topic. Be sure to check out our new podcast top of mine at Goldman Sachs US by also Nathan who's the senior strategist enough.

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