When Stephanie Cohen joined Goldman Sachs right out of college 25 years ago, even her fellow analysts could tell the fast-talking Chicago native was going to go far. Fizzing with energy, she was “scarily smart” and thrived on the long hours investment banking required.
Blunt yet very funny, she joined the elite partner ranks while still in her 30s. In 2020 she became the first woman in years to run a core operating division at the storied Wall Street bank, often a crucial stepping stone to the C-suite.
That record made Cohen’s announcement this week that she was leaving for IT service provider Cloudflare particularly depressing for many Goldman women, not least because she is the latest in a number of high-flying women to seek greener pastures.
Goldman has made measurable progress at promoting women in recent years and women run several of its non-core divisions. But the departure of someone routinely described as “all in on Goldman” has exacerbated concerns among bankers and recent alumni that the bank’s efforts to diversify are stalling out at the top.
One very senior banker noted that rival JPMorgan Chase has two female executives just below longtime leader Jamie Dimon, saying: “It’s possible that there will be a female CEO at JPMorgan, before there is another woman running a division at Goldman. And that’s depressing.”
The seeds were sown for Cohen’s exit two years ago. Chief executive David Solomon made her a division chief and the driver of Goldman’s ill-fated foray into consumer banking, where she became deeply focused on technology. The bank then changed tack in late 2022 with a reorganisation that left her atop a business with big parts that were being sold or wound down. When Cohen went on leave for family reasons in the middle of last year, the break gave her time to think about what she really wanted to do next.
“I’m a big believer in the importance of financial services and Goldman Sachs is a great institution. Having said that, I am also a very big believer in the importance of platform technology and how much that’s impacting and driving the world,” Cohen told the Financial Times. “I don’t want to just read about AI and cloud. I want to be part of building it.”
After joining Goldman in 1999, Cohen cut her teeth in mergers and acquisitions in both New York and San Francisco. She met her husband, who now runs an investment fund, at the bank: they bonded while eating pad Thai and watching American Idol in work conference rooms.
A former competitive ice skater, she valued tough feedback, making a practice of both seeking it out and giving it to those who worked with her. Colleagues describe her as “intense”, and as someone who “fills up a room” despite her small stature.
She had the first of her two children while competing to become a partner and the second while she was building a new Goldman banking unit focused on winning more business from big private equity firms. Friends said Cohen is just as intense about parenting as she is about work.
In 2017, she became chief strategy officer, which put her on Goldman’s management committee and in the thick of its search for more stable revenue streams to balance highly cyclical trading and investment banking. In 2020, Solomon elevated Cohen to run consumer and wealth management, a core division that he told investors was crucial to Goldman’s future.
Cohen jumped at the chance to develop retail banking and related technology from scratch. Her colleagues say her enthusiasm was infectious. “She thrives in moments of change, when things are uncertain, because she brings a lot of positive energy,” said Marco Argenti, Goldman’s chief information officer.
But the strategy turned sour, partly because of decisions taken before Cohen took over. A move into personal loans and the terms of Goldman’s contract with Apple to run the iPhone maker’s credit card meant that when economic conditions changed, the bank’s losses on the consumer business expanded even as it grew.
“It’s possible that they knew she was incredibly smart and thought ‘if anybody could turn it around, she can’,” says one Goldman veteran. “But the solutions she suggested all involved more investment and there was no appetite to spend.”
When Solomon publicly threw in the towel on the consumer business in 2022, he prioritised wealth and asset management. But his reorganisation gave that unit to Marc Nachmann, leaving Cohen with “platform solutions”, a division that included the businesses that Goldman was planning to exit. A few months later, Cohen faced a family health crisis. Given her highly visible position, she opted to take a sabbatical rather than have her attention divided.
To critics inside and outside the bank, it felt like Goldman had moved very quickly to pull the rug out from under a top female executive.
Cohen’s departure makes her the second woman on Goldman’s management committee to announce plans to leave in recent weeks. Beth Hammack, the other female member in a revenue producing role, is departing after she missed out on the chief financial officer job. There are six other women and 17 men listed as committee members. Other recent women who have left include Margaret Anadu, now with Vistria Group; Heather Miner, now with Advent International; Katie Koch, now chief executive of TCW; and Dina Powell McCormick, now at BDT & MSD Partners.
Last year, Goldman also paid $215mn to settle a long-running lawsuit alleging that parts of the bank had underpaid and failed to promote lower-level women for years.
Goldman executives argue that the bank is making progress on building the ranks of top women. Currently, a record 19 per cent of partners are female, and the most recent classes of new managing directors and partners had the most women in the bank’s history at 31 per cent and 29 per cent, respectively.
“While we need more women in senior positions, we do have women in some of our most senior roles including our general counsel, our controller, our head of strategy and IR [investor relations] and proven operators in our businesses,” said Jacqueline Arthur, global head of human capital and a management committee member. “Many other women have also had very senior jobs and incredibly successful careers at Goldman Sachs.”
After The Wall Street Journal reported last week that two-thirds of the women listed as partners in 2018 have left or no longer have the title, Solomon sent an audio message to the entire firm.
“While we have made progress in some areas, we certainly acknowledge that we have fallen short in others,” he said, according to people who listened to it. “Accelerating our progress through our global talent programmes, recruiting initiatives and rigorous review of our leadership pipeline . . . remains a critical focus.”
Cohen won’t be part of that progress. Though she initially intended to return after her leave, she realised that she had particularly enjoyed being part of a growth business. Seeking outside perspectives, she set up an informal lunch with Cloudflare chief executive Matthew Prince in the Utah ski town where she had moved with her family. Instead of just advice, he offered to create a role for her as chief strategy officer at the $33bn company.
Cohen said she found the opportunity attractive because Cloudflare is seeking to move beyond its roots as a platform provider of free cyber security to serving big businesses. Last year it had $1.3bn in revenue from 190,000 customers, but just 118 of them paid more than $1mn a year.
“It is at a stage where my skill set in terms of penetrating the C-suite is really valuable,” she said. “They have significant scale, but also have so much more scale to go.”