By Madalena Thirsk, Capital Markets, Aspectus Group
In the world of institutional finance, where numbers rule the roost and quarterly profits wield immense influence, the CEO of one of the largest investment banks moonlighting as a DJ might seem like an incongruous subplot. In case you missed it, David Solomon, CEO of Goldman Sachs has been periodically appearing as a DJ at clubs and resorts for the past few years, sometimes at high-profile events like Lollapalooza. The recent revelation that Solomon has decided to step back from his side gig as a DJ has sparked much debate over whether this move was an overly cautious response to shareholder concerns, or a prudent measure in the face of declining profits and thousands of layoffs. These kind of off-campus behaviours by high profile CEOs can pose vexing executive and crisis communications challenges for the companies’ corporate comms leaders and their PR agency partners.
CEO behaviour: a symphony of success or discordant shareholder distraction?
On the one hand, Goldman Sachs’ curt response that “David hasn’t publicly DJed an event in well over a year” response might appear as a knee-jerk reaction to quell shareholder unease. In an era of minute-by-minute scrutiny in capital markets, investors often demand unwavering focus from their leaders. With Goldman Sachs reporting a substantial decline in earnings, this development has raised serious questions about whether the CEO’s extracurricular activities might have been perceived as a distraction. From a shareholder perspective, it’s undoubtedly a valid concern. However, Goldman Sachs’ spokesperson offers a reasonable counterpoint. The notion that Solomon’s hobby had a direct impact on the bank’s financial performance might be a stretch. If music was indeed a personal passion that didn’t interfere with his professional duties, the media attention around it could arguably be more distracting than the hobby itself.
Goldman’s defensive PR response
In our post from 2022, we discussed how the personality of CEOs can become a brand in and of itself that individuals, who may not have heard of the brand before, will now know through the CEO. But becoming a “chief celebrity officer” is a whole other level of challenge for public companies. In the grand scheme of things, whether Solomon DJs or not might seem trivial. That said, the timing of the CEO’s decision to publicly distance himself from his DJing pursuits raises questions. In the context of a two-thirds drop in profits, it’s natural for shareholders to scrutinise any aspect of leadership that might potentially divert focus from restoring financial health. The internal communications concerns within the bank also must be considered. Declining profits can trigger a sense of urgency and scrutiny at any institution. If internal worries prompted this defensive response, it could signal that Goldman Sachs recognises the gravity of the situation and is willing to take corrective actions.
Yet, this episode serves as a reminder of the executive communications tightrope that CEOs of publicly listed companies walk. They must manage not only the performance of their organisations but also the perceptions of their stakeholders. In this case, Goldman Sachs’ reaction can be seen as proactive, a signal of attentiveness to shareholder concerns. However, it also raises questions about the underlying conditions that led to this highly defensive “music was not a distraction from David’s work. The media attention became a distraction” communications response in the first place.
Executive communications intersects with investor relations
Ultimately, David Solomon’s DJing hobby needs to be considered from a shareholder communications perspective. Sure, it’s all fun when things are going smoothly, but what if we hit rough patch and earnings take a dip? That’s when the communications and investor relations teams need to really weigh the pros and cons of these stunts. Imagine you’re a major shareholder in Goldman Sachs, watching the stock price slide. Would you feel reassured seeing the CEO spinning tracks at gigs instead of steering the ship?
In the age of social media, it’s all about perception and you’ve got to be on your toes, making sure the right image is being broadcast. It’s not about avoiding these media outlets; it’s about taking charge of the narrative. Solomon’s DJ career is a chance for a killer media strategy, turning this into a positive executive branding and boosting visibility on social platforms. In today’s world, those platforms are just as crucial as the traditional news outlets, and the approach needs to be just as savvy.