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#Goldman Sachs names its smallest partner class in decades

#Goldman Sachs names its smallest partner class in decades

Goldman Sachs just revealed its smallest partner class in decades as Chief Executive David Solomon further shrinks the megabank’s elite inner circle.

The $2 trillion financial services giant said Tuesday will add just 60 partners to its biennial class, down from the 69 Goldman named two years ago and one of its smallest batches since the mid-1990s.

Since taking over from longtime chief Lloyd Blankfein in October 2018, Solomon — who sometimes goes by his Electronic Dance Music alter-ego DJ D-Sol — has been culling the partnership in a bid to make Goldman less top-heavy and raise the bar for entry.

Before Thursday, Solomon had whittled it down to 450 partners that make an average $1 million on an annual basis, down from 500 under Blankfein.

The incoming class is 27 percent women, 4 percent Black and 3 percent Hispanic. Those are bigger percentages than those of the existing Goldman partnership and particularly reflect Solomon’s push to diversify the gender makeup of Goldman’s top ranks. One metric that didn’t budge is LGBT representation, which remains at 1 percent.

“Together, our new partners have more than 850 years of combined experience at Goldman Sachs, and bring deep and broad expertise to their new roles,” Solomon wrote in a statement. “Importantly, the class is accretive to the diversity of the partnership, as we continue to advance diversity and inclusion at our firm.”

More than half of the class was recruited by Goldman out of school. More than half are also in Goldman’s investment banking division, which Solomon and his No. 2, John Waldron, used to run before taking over the C-Suite. A major theme of Solomon’s leadership has been a focus on investment banking, moving away from the company’s global markets trading practice which was where Blankfein and his team hailed.

The newly minted partners will take part in a newly enhanced profit-sharing structure that uses a controversial tax break known as carried interest to give all Goldman partners a cut of future investment fund profits.

Solomon and his team borrowed the new system from the private equity world that has been stealing talent from Goldman and other bulge bracket banks for years.

But even some private equity players have criticized carried interest as a way of letting firms pay out executive income in the form of lower capital gains rates. In a clear attempt to combat that perception, Goldman has mulled lending partners up to $500,000 each that they would invest in the bank’s private funds and incentivize growth.

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