Goldman Sachs Group Inc. paid out well over $12 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 Officer 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 behavior from becoming public. The partner portrayed a leadership culture that favors 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.
“Anyone who works with David knows his respect for women, and his long record of creating an inclusive and supportive environment for women,” Kathy Ruemmler, the firm's general counsel, said in a statement. “Bloomberg’s reporting contains factual errors, and we dispute this story,” she said. Goldman did not elaborate further. Strongin didn’t respond to requests for comment.
The partner's complaint of improper behavior 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.
Diversity Joke
The issues echo what Wall Street women have been saying for years about life inside the industry. At Goldman, firsthand 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.