The Goldman Sachs Group, Inc. (NYSE:GS) may name chief operating officer John Waldron as its next chief executive as soon as next year, according to a Wall Street Journal report on September 28. He would succeed David Solomon.
Waldron has been widely reported as the likely successor since becoming president and chief operating officer, so the news here is the timing rather than the name.
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Goldman Would Hand Over a Firm Earning 16.9% on Equity:
Solomon would not be leaving under pressure on results, which is the unusual part. Most chief executives of large banks depart after something has gone wrong.
Goldman generated about $67.57 billion of revenue over the past twelve months. In the most recent quarter alone, revenue rose 42.5%, and earnings rose 78% against a year earlier, and return on equity reached 16.9%.
Trading and advisory work have both recovered, and the consumer banking experiment that damaged the previous few years has largely been unwound. That retreat cost time and capital, and finishing it is part of what the next chief executive inherits.
What remains is the firm Goldman was before the detour, which is an advisory and trading business that performs well when markets are active and less well when they are not.
So Waldron would inherit a firm performing well rather than one needing repair. A firm already working is harder to improve than one that is broken.
Continuity would be the point of the choice. If the board does settle on Waldron, an internal candidate who has run the operating side for years would suggest the current strategy continues, though nothing has been confirmed publicly.
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A Succession is When Rivals Approach Goldman’s Senior Bankers:
Senior bankers are mobile, and a change at the top is when competitors approach the ones who were passed over. Revenue at a firm like this follows relationships, so departures cost more than the salaries attached to them.
Goldman has lost senior people to private equity and to rivals repeatedly over the past decade, and each exit takes client coverage with it. A confirmed succession concentrates that risk into a few months.
That risk is highest in the months either side of an announcement, when the outcome is known but the new structure is not. Rivals understand the timing as well as Goldman does.
The timing also lands in an unusually good stretch. Earnings up 78% in a single quarter came from trading and advisory activity, which is cyclical, and a new chief executive measured against that comparison starts at a disadvantage.
Valuation says investors are aware of the cycle. Goldman trades at about 14 times trailing earnings and 2.52 times book value, which prices in the current conditions rather than average ones.
Conclusion:
Handing over from strength is the best version of this event. Waldron would inherit a firm that has repaired its returns and retreated from consumer banking. However, the numbers he would be measured against were set in an exceptional quarter for trading and advisory. A succession is also the moment rival firms approach the bankers who wanted the job, and the shares are already priced for good conditions rather than average ones.
Market Sentiment:
The Goldman Sachs Group, Inc. was held by 92 hedge funds with a combined stake value of about $11.2 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 83 hedge fund holders with a cumulative investment value of around $8.8 billion in the previous quarter.
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This article is originally published at Insider Monkey.
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