When Stephanie Cohen joined Goldman Sachs straight out of college 25 years ago, even her fellow analysts could tell the fast-talking Chicago native was going to go further. She was full of energy, was “frighteningly intelligent” and thrived in the long hours that investment banking required.
Frank but very funny, she joined the ranks of elite partners while still in her 30s. In 2020, she became the first woman in years to run a core operating division at the iconic Wall Street bank, which is often a crucial stepping stone to executive management.
That record made Cohen's announcement this week that she was leaving for IT services provider Cloudflare, particularly frustrating for many women at Goldman, not least because she is the latest in a number of women taking to high altitude in search of greener pastures.
Goldman has made significant progress in promoting women in recent years and many of its non-core divisions are run by women. But the departure of the person routinely described as “all about Goldman” has exacerbated fears among bankers and recent graduates that the bank's efforts to diversify at the top will falter.
One senior banker noted that rival JPMorgan Chase has two female CEOs slightly fewer than long-time CEO Jamie Dimon, saying: “It is possible that there will be a female CEO at JPMorgan before there is another woman running a division.” “At Goldman. And that's frustrating.”
The seeds of Cohen's exit were planted two years ago. CEO David Solomon made her a division head and a driver of Goldman's ill-fated foray into consumer banking, where she became laser-focused on technology. The bank then changed course in late 2022 through a reorganization that left it at the helm of a business with significant parts sold or spun off. When Cohen went on vacation for family reasons in the middle of last year, the break gave her time to think about what she wanted to do next.
“I'm a big believer in the importance of financial services and Goldman Sachs is a great institution. However, I'm also a big believer in the importance of platform technology and how it impacts and drives the world. “I don't want to just read about AI and the cloud. I want to be a part of building it.”
After joining Goldman in 1999, Cohen began her career 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 over pad thai and watching American Idol in business conference rooms.
A former figure skater, she valued tough feedback, and was trained to seek it out and give it to those who worked with her. Her colleagues describe her as “intense,” who “fills a room” despite her small stature.
She had the first of her two children while vying to become partner, and the second while building a new Goldman banking unit focused on winning more business from major private equity firms. Friends said Cohen was as interested in raising children as she was in working.
In 2017, she became chief strategy officer, putting her on Goldman's management committee and in the midst of its search for more stable revenue streams to balance highly cyclical trading and investment banking. In 2020, Solomon promoted Cohen to run consumer and wealth management, a key division that he told investors was important to Goldman's future.
Cohen took the opportunity to develop retail banking and related technology from scratch. Her colleagues say her enthusiasm was contagious. “She thrives in moments of change, when things are uncertain, because she brings a lot of positive energy,” said Marco Argenti, chief information officer at Goldman.
But the strategy went sour, in part because of decisions made before Cohen took office. The move into personal loans and the terms of Goldman Sachs' contract with Apple to operate the iPhone maker's credit card mean that when economic conditions change, the bank's losses in the consumer business expand even as they grow.
“They probably knew she was incredibly smart, and they thought: If anyone can turn things around, she can,” says the Goldman veteran. “But the solutions I proposed all involved more investment and there was no desire to spend.”
When Solomon publicly exited the consumer business in 2022, he prioritized wealth and asset management. But his reorganization gave that unit to Mark Nachman, leaving Cohen with Platform Solutions, a division that included companies Goldman was planning to exit. A few months later, Cohen faced a family health crisis. Given her highly visible position, she chose to take a vacation rather than divide her attention.
To critics inside and outside the bank, it looked as if Goldman had moved too quickly to pull the rug 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, another member of the revenue production role, is leaving after missing out on the CFO role. There are six other women and 17 men listed as members of the committee. Other women who have recently left include Margaret Anadu, who now works at Vistria Group; Heather Miner, now with Advent International; Katie Koch, now CEO of TCW; and Dina Powell McCormick, now at BDT & MSD Partners.
Last year, Goldman also paid $215 million to settle a long-running lawsuit alleging that parts of the bank underpaid and failed to promote women at lower levels for years.
Goldman executives say the bank is making progress in building the ranks of women in senior positions. Currently, 19 percent of partners are women, and the most recent classes of managing directors and new partners had the largest number of women in the bank's history at 31 percent and 29 percent, respectively.
“While we need more women in senior positions, we have women in some of our senior roles, including our general counsel, our controller, our chief strategy officer and our director of investor relations.” [investor relations] Certified Operators are in our business,” said Jacqueline Arthur, Global Head of Human Capital and Member of the Management Committee. “Many other women have also had very senior positions 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 had left or no longer held the title, Solomon sent a voice 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 him. “Accelerating our progress through our global talent programs, recruiting initiatives and rigorous review of our leadership pipeline… remains a critical focus.
Recommended
Cohen will not be part of that progress. Although she initially intended to return after her vacation, she realized that she especially enjoyed being part of a growing company. Seeking outside perspectives, she set up a casual lunch with Cloudflare CEO Matthew Prince in the Utah ski town where she had moved with her family. Instead of just providing advice, he offered her a role as head of strategy at the $33 billion company.
Cohen said she found the opportunity attractive as Cloudflare seeks to move beyond its roots as a free cybersecurity platform provider to serve larger enterprises. Last year, it generated $1.3 billion in revenue from 190,000 customers, but only 118 of them paid more than $1 million annually.
“I'm at a point where my skills in terms of executive penetration are really valuable,” she said. “They have a lot of scope, but they also have a lot more scope to achieve.”
