Goldman Sachs gives $80M reason to keep Waldron waiting for top job

(Bloomberg) -- At Goldman Sachs Group Inc., there’s a “war for talent.” Now, the company is trying to retain one talent: John Waldron.

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The bank's president and chief operating officer has long been considered the top choice to succeed his boss, CEO David Solomon. It also made him a target for poaching, as he was six years into his tenure as No. 2.

This week, the bank's board of directors sent him a message: Waldron, 55, remains in the best position to succeed Solomon, who turned 63 on Friday, if he chooses to stick around.

This takes the form of an $80 million restricted stock plan that can remain in place for an additional five years. In another rare move, Waldron received an award that matched one his boss received.

This is the second time in more than three years that the two executives have received a package. Previous rewards required the stock to hit certain benchmarks and outperform competitors to be fully unlocked. Goldman Sachs mentioned "the war for talent is rapidly intensifying" when handing out talent.

It is relatively rare for only one representative to receive such an award. Over the past 18 months, Apollo Global Management Inc. and BlackRock Inc. have picked up a slate of senior executives as they work to retain talent through long-term programs. Even though Goldman awarded the first round of funding three years ago, it expanded the special award to a broader group of executives after investor pushback.

On Friday, the company said the awards to the two executives were aimed at "maintaining a strong succession plan for the company's future." The firm also said the retention program and a separate program that provides leaders with substantial carried interest earned on private equity funds were designed with "the unique competitive threats to talent faced by Goldman Sachs."

Waldron shunned overtures from other firms including Carlyle Group Inc. - a move that was visible on Goldman's board. Apollo also held discussions with Waldron about joining the company, The Wall Street Journal reported in December.

Waldron was a charismatic investment banker who spent nearly three decades tracking Solomon at two different companies. The pair's relationship goes back to Bear Stearns in the early 1990s, when Waldron started working as an investment banking analyst and Solomon sold junk bonds. Solomon first defected to Goldman Sachs, then seduced Waldron, ultimately allowing him to climb the ladder. In 2018, the Goldman Sachs board appointed Solomon as CEO and Waldron as sole president.

The company outperformed its peers last year, with its core business successfully rebounding. When Solomon gained goodwill from his success, he sent a telegram to his colleagues saying he was in no rush to fire them.

But his fortunes looked very different less than two years ago, when revenue slumped and internal frustrations over Salomon's failed push into consumer banking came into public view.

Waldron finds himself in hot water as colleagues urge him to take action against their top boss. But Waldron rejected the effort, pleading with the company's partners to be patient. His patient pleas paid off as Goldman Sachs' fortunes turned around and its performance soared.