From Wall Street Success to a Shocking Comeback at Goldman Sachs – You Won’t Believe Tom Montag’s Incredible Journey!

After Tom Montag fell behind in the race to lead Goldman Sachs in 2006, he wasted no time in forging a new path in a Wall Street rival. He is now on his way back to the bank at a time when he is lagging behind some of his peers.

THE scheduled appointment, announced by Goldman on Thursday, has been in the works for a while. Montag, 66, began talks with the bank about a year ago, according to a person familiar with the matter, as Goldman sought a replacement for Mark Winkelman, another former Goldman senior executive who retired from the board this year. .

Ending up in a Wall Street boardroom is a familiar ending for an industry great like Montag. He spent 22 years a Goldman and then served as second-in-command at Bank of America in a productive 13-year stint, which ended in 2021 following news stories that raised questions about the culture he fostered.

His return comes amid heightened attention over Goldman’s alleged malaise, with the group’s stock performance trailing rivals and chief executive David Solomon facing a constant barrage of negative media coverage.

The nomination was big news this week at Goldman’s 200 West headquarters in lower Manhattan and also sparked debate among the bank’s alumni network, whose members include prime ministers, CEOs and billionaire investors.

One side expects Montag to be a backer on the board for Solomon, 61, in what is a part-time job. Others see him as a member of the old guard who will add much-needed trading experience to the boardroom and won’t be afraid to report any issues to Goldman.

“He has no problem saying what he thinks. But he doesn’t run the company, he’s sitting on the board of directors,” said a former Goldman executive who has worked with both Montag and Solomon.

The Financial Times spoke to a dozen of Montag’s former colleagues at Goldman and the BofA. He has won praise for his keen eye for detail and demanding leadership style that could generate deep loyalty. But some who have clashed with him have portrayed a combative figure, with several former colleagues describing him as a “bully”.

Montag did not respond to requests for comment.

“The priority is to always have strong risk management expertise on the board,” said Tony Fratto, a spokesman for Goldman. “It is rare to find candidates with senior experience at large, complex global financial institutions willing to serve as independent directors.”

A physically imposing and charged Wall Street figure, Montag — or Monty as he’s known to friends — joined Goldman in 1985, when it was still a tight-knit private firm controlled by his elite group of partners.

An economics graduate from Stanford University, he worked as a derivatives trader and became a partner in 1994. He honed his credentials when he helped lead the group’s Japanese operations and co-managed Goldman’s Asian trading franchise.

“He was amazing running the business in Asia,” recalled a former colleague.

Beth Hammack, co-head of Goldman’s global finance group who has worked with Montag for several years, described him as “one of the most inspiring leaders I’ve worked with.”

“He’s really charismatic and energetic, he really knows how to support a business and people, and how to make them feel involved and pay attention and get the best out of them,” Hammack told the FT.

Montag became co-head of global sales and commerce, but left Goldman in late 2007 after losing to Gary Cohn and Jon Winkelried in a promotion race to become group co-chairman under Lloyd Blankfein.

In 2010, Montag reappeared on behalf of Goldman in congressional hearings in the aftermath of the financial crisis, when lawmakers seized a June 2007 email he had sent referencing Timberwolf, a 1 billion dollars that Goldman was working on, like “shit”.

“How much of that bullshit business did you sell to your customers after June 22, 2007?” then-Senator Carl Levin asked another former Goldman executive, Daniel Sparks, in 2010. Sparks said Montag was referring to Goldman’s performance on Timberwolf, not the deal itself.

Solomon, meanwhile, joined Goldman in 1999 from Bear Stearns. The two men were both partners in what was then Goldman’s bond division, though Solomon was a leverage finance banker while Montag worked as a trader and they weren’t particularly close, according to people who were there at the time.

Montag joined Merrill in 2008, where he went to work for John Thain, another Goldman ally, after being lured with a $39 million package. Within months of his arrival, Merrill agreed to be taken over by the BofA in a hasty merger to save the investment bank.

Montag was instrumental in integrating Merrill into BofA and has steadily expanded his portfolio of responsibilities, rising to chief operating officer and president of banking and global markets. He has also strengthened the bank’s diversity programs, pushing to recruit from a wider range of schools and spearheading a recruiting effort in Africa.

“Tom Montag did a great job at Bank of America during one of the most challenging periods in financial services history,” the BofA said in a statement this week.

He left the bank in 2021 after 13 years, just months after a New York Times report said Montag was a polarizing figure within BofA, he made favorites with some employees and dated some female employees.

Montag became chief executive officer last year of California-based Rubicon Carbon, a carbon offsetting software platform backed by private investment group TPG. With a seat on Goldman’s board of directors, he will return to Wall Street.

But he will return to a markedly different group than the one he left 15 years ago. Goldman was transformed into a bank holding company during the 2008 financial crisis and has adjusted to life as a much more regulated organization that can no longer rely on the risky operations of its heyday.

For a while it looked like Goldman’s next big bet would be a push into consumer banking. But following billions of dollars in lossesGoldman is now in the process of scaling that business.

Solomon, who took over from Blankfein in 2018, is emphasizing growth plans in wealth and wealth management to deliver the kind of steady profits that have boosted longtime rival Morgan Stanley’s share price.

But morale has been hit by layoffs earlier in the year and discontent among traders over how much they were paid for a record performance in 2022. With investment banking still in the doldrums and a trading boom starting to fade, there are concerns that the rest of the year will be challenging.

Several Goldman executives say privately that 2023 is shaping up to be another disappointing year for compensation. More layoffs could come in September, with Goldman also considering cutting staff it deems underperforming, a process it resumed last year after a hiatus during the coronavirus pandemic.

When Goldman reports second-quarter earnings July 19, analysts expect earnings per share to be down about 8% from a year earlier, according to consensus data compiled by Bloomberg. Rivals JPMorgan Chase and Morgan Stanley, which depend less on trading and investment banking, should provide EPS improvement.

Montag’s return has sparked some speculation on Wall Street that he may still yearn for the chance to run his old bank.

“I bet he thinks in the back of his mind he could be the CEO of Goldman Sachs,” said a person who worked with Montag at Goldman. “I bet he does.”