Morning Coffee: How to earn $47m at Goldman Sachs. Hedge fund hiring is only going to intensify

For a brief moment last week, Jamie Dimon, CEO of JPMorgan, may have felt rich. Dimon found out on Thursday that he earned $43m for 2025, which was 10% more than the previous year and more than all his JPMorgan executive colleagues. But then David Solomon came along.

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David Solomon, who is CEO of Goldman Sachs, is being paid $47m for last year. The Wall Street Journal notes that this is 21% more than Solomon was paid for 2024. It includes $3.4m of carried interest so that he feels like he works in private equity.

What's required to earn that kind of money at Goldman Sachs? You can possibly do it as a very, very successful trader - three years ago, Goldman's commodities traders were reportedly anticipating $30m each. And every year, Goldman pays a mysterious group of 13 people over $9.5m in London.

In Solomon's case, though, the big payday reflects his fine job running Goldman Sachs and there is the helpful equivalent of a report card explaining why Goldman felt moved to pay him so much. This says that Solomon "continued" doing many things, including creating "shareholder value", generating "strong momentum" on executing strategic priorities and emphasizing a strong risk and controls environment. Solomon's report says he also displayed a desirable, "enduring and relentless focus" on Goldman's culture and core values.  

All of this sounds relatively easy. Goldman's share price is up 32% on last year, but this is partly to do with the easing of bank capital rules imposed after the financial crisis than Solomon's prowess personally. "The regulatory environment over the last five years put costs and burdens on the firm that we now won't have going forward," he said on the firm's results call this month. The FT noted last July that revisions to US stress test methodology have benefitted Goldman in particular, which saw its potential losses under the tests fall from an estimated $18bn to just $300m after private equity investments were excluded from the Fed's market shock scenario. Goldman, in particular, has a lot of these.  

While David Solomon's pay may be nice for David Solomon, his report card contains some reassurance for others at Goldman, too. Solomon has also continued with the "advancement" of Goldman's "people strategy," says the card. In doing so, he has considered, "the ongoing competitive threat to our best talent from both traditional banking peers as well as alternative asset managers and other non-bank liquidity providers."  

In simple language, this means that Solomon's pay reflects his awareness that Goldman's best people are being tempted by hedge funds and electronic trading firms. He's being paid generously to reflect that. Maybe they are too? 

Separately, hedge funds might pinch more of Goldman's people this year. The Wall Street Journal notes that a recent Goldman Sachs survey of fund managers found that a net 45% of them plan to increase their exposure to hedge fund this year. This is an all-time high for the survey, which dates back to 2017. 

Meanwhile...

Chris Hohn has made a lot of money, but his hedge fund TCI Fund Management doesn't look much like a hedge fund. He manages a concentrated portfolio of stocks, hasn’t put a short on for three years and holds positions for an average of eight years. His investment team is only seven or eight people. (Net Interest) 

Jamie Gavin, head of prime brokerage clearing for Europe, the Middle East and Africa at Societe General, left the bank to work as an external consultant for the London Stock Exchange Group’s SwapAgent platform. (Risk)

TCP Capital Corp, a BlackRock private credit fund, expects to mark its assets down 19%. (Bloomberg) 

Revolut is expanding in Switzerland, where it wants to hire a head of risk, head of legal, a treasury manager, tax manager, business risk manager, and a strategy & operations person. (FiNews)

Revolut may not buy an existing bank in the US and might apply for its own license instead (implying a lot of hiring). (FT) 

Ken Griffin was one of the few dissenting voices at Davos. “Why are we fighting over a piece of rock covered by ice,” he asked. “We have frayed relationships with our European allies in ways that I don’t understand or appreciate.” (Financial Times) 

Natural gas prices jumped unexpectedly and maybe this was bad for hedge funds. (Bloomberg) 

Credentials were a fiction. The credential was a proxy, a compression algorithm for trust. It worked when the cost of direct evaluation was prohibitive. That cost is collapsing. (Exponential View) 

Accounting firm Grant Thornton has been deluged with students applying using AI. It is closing job ads earlier and capping the volume of applicants in response and now has 39 applicants per job instead of 60. (The Times) 

Mercor is paying young professionals $95 an hour to train AI that can do their jobs. “I give [the AI] a problem, [such as] how a company like Boeing could handle the challenge post-crash — damage control, how would it impact the business, how would they handle stakeholders . . . and look at how the AI responds. You’re challenging [the models] and correcting them.” (FT)

Overall, across all occupations and certification levels, AI skill signals raise interview probabilities by between 8 and 15 percentage points. (Arvix)

Jeremy Coller is a vegan activist who failed his A-levels three times and just sold his private equity secondaries business for £3.2bn. When he retires he will probably campaign against factory farming. (FT) 

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