Goldman Sachs Group Inc. paid out well over $12 million to a veteran executive who complained internally about a toxic workplace for women at the firm’s highest levels.
According to people familiar with the matter, 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. The remarks she described, as well as the list of people allegedly behind them, shook the firm’s upper echelons, including Chief Executive Officer David Solomon.
The confidential payment is likely to be among the largest of its kind on Wall Street, where companies use their deep pockets to keep allegations of questionable behavior from becoming public. The partner portrayed a leadership culture that favors men, mistreats women, and underpays them, the people said, declining to be identified because they were discussing a private matter.
According to the complaint, Solomon once boasted to a group of male colleagues that he was probably the only one present who had oral sex the night before. Three executives who heard or heard about the remark said they were surprised because it was so out of character for the CEO. Nobody knew it was later used as part of a bank complaint.
According to the people, Solomon, 60, was not the main focus of the complaint, which sought to sketch out an institutional problem. It provided examples of pay disparities in order to demonstrate that the firm offers lower pay packages to women. Other managers, such as former head of investment research Steven Strongin, were also accused of making dismissive remarks, according to the sources.
They said the potential for embarrassment drove Goldman Sachs’ decision to settle, especially since its new CEO, who took over in October 2018, was publicly touting the bank’s efforts to improve diversity.
The majority of the incidents described took place in 2018 and 2019. It’s unclear how the settlement was put together.
“Anyone who works with David knows his respect for women and his long track record of creating an inclusive and supportive environment for women,” said Kathy Ruemmler, general counsel at the firm. Bloomberg’s story “contains factual errors,” she said, without going into further detail. Strongin did not respond to comment requests.
Some former colleagues were enraged by the partner’s complaint of inappropriate behavior. Bloomberg is not naming her in part because she never made her accusations public and now works for another firm. She did not respond to requests for comment.
Joke about Diversity
The issues echo what Wall Street women have been saying about the industry for years. Firsthand accounts from Goldman have been woven into a class-action lawsuit about pay and a recent memoir by a former managing director, Jamie Fiore Higgins.
However, it is almost unheard of for women who advance to levels as high as Goldman’s partnership to air their most heinous experiences. Even complaining in front of coworkers about the slow progress toward improving workplace equality has been viewed as a form of betrayal.
The partner who later complained asked women on the bank’s board about diversity at an internal event in 2019. She joked that executives seemed to have to be White and bald to run the firm, a clear reference to Solomon and predecessors. According to sources, the management team was enraged by the remarks.
The partner was no stranger to bank administration. She held senior positions in one of the firm’s divisions and worked in positions near the C-suite. She was passed over for a promotion in her final months, which would have given her a more visible position in the industry.
According to people familiar with the complaint, it detailed male executives criticizing the appearance of women at the bank, including their weight and necklines. Some managers allegedly advised them on how to improve their appearance, including fitness regimens. It described men asking senior-level women to do menial tasks like fetching coffee and, in one instance, comparing women to flight crew during a meeting to discuss gender issues.
Such behavior may not surprise industry veterans who have grown accustomed to such talk. Nonetheless, the amount paid by the firm represents a rare figure in the market for secrecy.
The ‘Boys’ Club’
Her portrayal of the firm would have been at odds with Solomon’s public commitments to advance women and improve diversity and inclusivity. He told Congress in April 2019 that “a core part of my tenure as CEO will be defined by our progress” in improving diversity.
He has pushed recruiters at the bank to make women at least 50% of new hires. Goldman’s latest partnership class included a record number of women this month.
However, visible progress at the top of the bank and its revenue-generating divisions has been elusive, causing concern among colleagues.
Cristina Chen-class-action Oster’s lawsuit against the bank is the industry’s most visible over gender. It focuses on compensation and promotions. Attorneys suing the firm also attempted to bring a claim that it has a “boys’ club” atmosphere, but the court said that would necessitate “individualized inquiries” into incidents and would not be class actionable. The bank has denied the lawsuit’s allegations.
According to a person familiar with the situation, some executives on the bank’s legal team recently pushed for the start of settlement talks with the class-action plaintiffs. Resolving that case would eliminate the possibility of further embarrassment from a trial. It’s unclear whether Solomon has given permission to