- Goldman Sachs CEO David Solomon is facing a challenge from a major investment adviser.
- The advisor recommended separating the roles of CEO and chairman to provide more independent oversight.
- The annual meeting vote comes amid scrutiny of Goldman's consumer business and human resources issues.
Goldman Sachs' CEO faces new challenges to his leadership as an advisor to some of the bank's biggest investors.
Proxy voting advisory firm Institutional Shareholder Services (ISS) is calling on Goldman to separate the roles of CEO and chairman. David Solomon has been CEO since October 2018 and took over the role of chairman a few months later.
ISS called for increased “independent oversight” of the company in a report sent Wednesday ahead of its April shareholder meeting, Reuters reported. ISS, which recommends how investors vote in company meetings, gave “cautious support” for Goldman's executive compensation.
During Mr. Solomon's tenure as CEO, the stock price soared 83%. However, a series of recent issues have brought more attention to him. The bank has gone into damage control mode in recent weeks following a Wall Street Journal article in March that said Goldman lacked female leadership, including a wave of women leaving under Ms. Solomon. It broke in. One of those executives, Stephanie Cohen, led the bank's big bet on the consumer space. Goldman has experienced billions of dollars in losses and is currently exiting his business.
“Solomon's foray into the consumer space was met with failure and huge losses, which appears to have spilled over into further human capital issues,” ISS said in a report on Wednesday.
After Goldman's governance committee evaluated the combination of CEO and chairman in December, the board reaffirmed that it was the “most effective leadership structure,” according to the company's annual meeting documents. .
Goldman did not respond to a request for comment from Business Insider outside of normal business hours.
ISS recommended voting on Goldman's board nominees, including incoming lead independent director David Binier. He joined the board in 2013 after leaving the bank, most recently serving as chief financial officer.
“Some may question the decision to promote a former Goldman executive to the role at this time,” ISS wrote.
