The Woman Rising From Goldman Trader to Its Face on Wall Street
(Bloomberg) -- One after the other as the morning wore on, Goldman Sachs Group Inc.’s most senior leaders -- all men -- took turns on stage describing their plan to restore its dimmed star.
Much of it rests on a woman who’s being groomed to join them.
The strategy Goldman laid out at its investor day depends heavily on the normally staid office of its treasurer, Beth Hammack, a longtime trader who’s quietly charting her way up the ranks. Her challenge: rework how the bank funds everything from consumer loans to billion-dollar derivatives deals. Senior leaders see the mandate as proof she’s bound for higher office at the 151-year-old firm.
As Goldman struggles to make good on pledges to recruit more women into its most senior offices, Hammack is among a small number who make the cut in every behind-the-scenes conversation. Insiders see her as a likely candidate to someday serve as chief financial officer, lead the trading division or take a number of other top posts -- jobs that would make her one of the bank’s most prominent faces on Wall Street.
Yet in many ways Hammack is atypical at Goldman. She doesn’t project the swagger of its high fliers and keeps her ties to a number of illustrious industry figures under close wrap. Relatively few at the bank are aware, for instance, that her father helped start Renaissance Technologies, one of the world’s most renowned money-making machines.
She may well be the type of leader that Goldman needs as it asks shareholders to believe in a less flashy strategy for reestablishing its industry dominance.
“She’s brilliant and she can explain the most complicated things in standard English,” said Marty Chavez, the bank’s former chief financial officer. “Once I thought of challenging her and asked if she could explain something in a Haiku,” he said, recalling a conversation about liquidity coverage ratios. By the next morning, her response was waiting in his inbox. “That’s Beth.”
Now, Goldman is placing her work squarely in the public glare. Last month the bank laid out a strategy for boosting revenue with a mix of new business lines and technology -- an initiative that soon hit its first bumps with a spate of executive departures. But just as important to the firm’s new profitability goals are its plans for improving the way it funds itself.
“That column sits squarely on the shoulders of Beth,” current CFO Stephen Scherr said. “Her sensibility about the markets is uncommon among individuals who sit in the seat of the treasurer.”
Even in an industry where men dominate every major firm, the dearth of women atop Goldman is stark. None has ever served as its chair, chief executive officer, president, chief operating officer or CFO. Not a single division boasts a female leader. Only two women have been so-called named executive officers -- but none since 2005.
Hammack, 48, is among a small number of executives positioned to help correct the imbalance. Others include Stephanie Cohen, the chief strategy officer who became the youngest member of Goldman’s elite management committee in 2018, and Carey Halio, the head of Goldman’s banking subsidiary. Hammack declined to comment.
Already, Hammack’s climb at Goldman has taken her far outside the shadow of her father, Howard Morgan, a prominent venture-capitalist who previously helped Jim Simons start Renaissance. Simons was at her bat mitzvah and the two now sit on the same board of a math advocacy group. Some of her colleagues only learned about those ties recently when the bank was hunting for ways to win more business from the hedge fund.
“She’s always wanted to make it on her own,” Morgan said.
Raised just outside Philadelphia, Hammack is the middle of three sisters. The older chose a path into business, and the younger became a private detective. Hammack would end up on Wall Street after an eventful stint at Stanford University.
She was part of a council of student presidents at Stanford that included the guy who played the Wing Kid in 1980s classic “Gremlins” and John Overdeck, who went on to become the billionaire hedge fund manager behind Two Sigma Investments.
Her classes included one on options with Myron Scholes. He helped develop the founding construct for pricing the instruments -- the Black-Scholes model -- and went on to win a Nobel prize. He later co-founded the hedge fund Long-Term Capital Management.
Hammack spent two summer internships on the floor of the Philadelphia Stock Exchange before accepting a campus offer from Goldman Sachs in 1993. Early on, she parlayed her acceptance to Harvard Business School into a promotion. She’s been rising ever since.
Women were establishing themselves in the trading division in the 1990s as derivatives markets embarked on their rapid -- and perilous -- growth. Many of Hammack’s female peers gravitated toward sales roles, which left her as something of an anomaly, said Chip Carver, who ran the derivatives desk at the time.
She was part of a small cluster of traders with a direct view of Wall Street’s biggest earthquakes -- Orange County’s municipal bond default, Gibson Greetings’ botched bets on derivatives, legal blowups around Bankers Trust and the implosion of Scholes’s LTCM. Each had to be navigated carefully.
“I certainly had some traders, where you became worried when there were some tough questions,” Carver said. “With her, you can count on ending up in the right place.”
In the decade that followed, there would be fawning attention on Goldman’s big risk takers -- often top traders who went all-in and made fortunes for the bank. Hammack was never seen in that category.
She would go on to hold a variety of key roles dealing with agency bonds, rates and repo trading. Ultimately, her rise to prominence was driven by her ability to deal with regulators and government bodies after she made partner in 2010. She’s now chair of an influential Wall Street advisory group that has the ear of the U.S. Treasury secretary.
One snag was the inclusion of her name in high-profile civil litigation accusing big banks of colluding to rig the prices of bonds issued by Fannie Mae and Freddie Mac. Plaintiffs named dozens of Wall Street executives -- not as defendants but as “key personnel.” Like others, the firm settled. Hammack’s career has continued apace.
Her elevation to treasurer in 2018 was controversial within the bank for a different reason: Top executives couldn’t agree on whether the trading unit could spare one of its rare senior women. It’s another sign of the tensions Chief Executive David Solomon will face as he tries to make good on promises for advancing women, both at his own firm and others.
Goldman’s treasury is in the midst of a shift, too, reducing its reliance on potentially fleeting or expensive funding markets and embracing a model increasingly based on customer deposits and managing corporate cash flows. That will be integral to boosting revenue, thanks to an accounting quirk. Improving the mix of funding and cutting interest costs feeds straight into the bank’s top line.
For Hammack, the job may just be the start of infiltrating the top tier of the male-dominated firm.
“Goldman is at least trying to solve for this difficult problem,” said Leslie Sillcox, one of the bank’s named executive officers when it went public in 1999. “Twenty years later, I would have expected a lot more women in senior roles across the industry.”
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