Goldman Sachs paid out well over $12 million (€11.97 million) to a veteran executive who complained internally about a toxic workplace for women in the highest echelons of Wall Street’s most prestigious firm.
The bank settled with the departing partner two years ago, in a deal that kept secret her detailed account of senior executives making vulgar and dismissive comments about women, according to people with knowledge of the matter. The upper rungs of the firm were rattled by the remarks she described and the roster of people allegedly behind them, including chief executive David Solomon.
The confidential payment is likely among the largest of its kind on Wall Street, where firms use their deep pockets to prevent accusations of troubling behaviour from becoming public. The partner portrayed a leadership culture that favours men, mistreats women and pays them less, the people said, asking not to be named discussing a private matter.
As for Solomon, the complaint alleged that he once bragged to a gathering of male colleagues that he was probably the only one present who received oral sex the night before, the people said. Three executives – who either heard the remark or heard of it at the time – said they were surprised because it was so out of character for the CEO. None was aware that it later became part of a complaint to the bank.
Solomon, 60, wasn’t the main focus of the complaint, which sought to sketch out an institutional problem, the people said. It provided examples of pay disparities, aiming to show the firm awards smaller packages to women. And there were more incidents of dismissive remarks by other managers, such as former head of investment research Steven Strongin, the people said.
The potential for embarrassment for Goldman Sachs drove its decision to settle, they said, especially at a time when its new CEO, who took over in October 2018, was publicly touting the bank’s efforts to improve diversity.
Most of the incidents described occurred in 2018 and 2019. It’s unclear how the settlement was structured.
A spokeswoman for Goldman referred questions to the bank’s general counsel, Kathy Ruemmler, who declined to comment. Strongin didn’t respond to requests for comment.
The partner’s complaint of improper behaviour stirred up resentment among some former colleagues. Bloomberg is not naming her in part because she never went public with her accusations and now works at another firm. She declined requests for comment.
The issues echo what Wall Street women have been saying for years about life inside the industry. At Goldman, first-hand accounts have been woven into a class-action lawsuit focusing on pay and a recent memoir by a former managing director, Jamie Fiore Higgins.
But it’s practically unheard of for women who gain entry to levels as high as Goldman’s partnership to air their ugliest experiences. Even complaining in front of colleagues about the slow progress in improving workplace equality has been seen as a kind of betrayal.
At an internal event in 2019, the partner who later complained asked women on the bank’s board about diversity. She joked that it appeared executives had to be White and bald to run the firm, an apparent reference to Solomon and predecessors. The management team was furious with the remarks, people said.
The partner was no stranger to bank leadership. She worked in posts around the C-suite, met top executives and held senior positions in one of the firm’s divisions. In her final months, she was passed over for a promotion that would have given her a more visible perch in the industry.
People with knowledge of the complaint said that it recounted male executives critiquing the appearance of women at the bank, including weight and necklines. Some managers allegedly told them how they could look better, suggesting fitness regimens. It described men asking senior-ranking women to do menial tasks, such as fetching coffee, and in one instance likening women to flight crew in a meeting to discuss gender issues.
Such behaviour may not shock industry veterans inured to such talk. Yet the sum the firm paid puts a rare number on the going price of secrecy.
Her portrayal of the firm would have clashed with Solomon’s public pledges to advance women and improve diversity and inclusivity. In April 2019, he told Congress that “a core part of my tenure as CEO will be defined by our progress in improving diversity.
He’s pushed the bank’s recruiters to make women at least 50 per cent of new hires. This month, Goldman’s latest partnership class included a record number of women.
But visible progress at the very top of the bank and its revenue-generating divisions has proved elusive and a point of consternation for colleagues.
The class-action lawsuit against the bank, filed by Cristina Chen-Oster, is the industry’s most prominent over gender. It focuses on pay and promotions. Attorneys suing the firm also tried to bring a claim that it has a “boys’ club atmosphere, but the court said that would require “individualised inquiries” into incidents and didn’t qualify for class treatment. The bank has denied the allegations in the lawsuit.
Some executives in the bank’s legal team recently pushed to open settlement talks to the class-action plaintiffs, a person with knowledge of the matter said. Resolving that case would defuse the risk that a trial could inflict further embarrassment. It’s unclear whether Solomon has granted approval to negotiate. – Bloomberg
