Lloyd Blankfein, Goldman Sachs Group Inc. chief executive officer plans to step down as soon as the end of this year, the Wall Street Journal reported.
The investment bank intends to replace Blankfein, 63, with one of its two co-presidents, David Solomon or Harvey Schwartz, the newspaper said Friday, citing people familiar with the matter that it didn’t identify. A spokesman for New York-based Goldman Sachs declined to comment.
Blankfein, who underwent chemotherapy for lymphoma more than two years ago, led the bank through the financial crisis in better shape than most rivals, and the company capitalized with record trading revenues. In recent years, the firm has been hit by a slowdown in the markets business, as 2017 was its worst year in trading under Blankfein’s watch.
The CEO remains in control of the timing of his exit, the Journal reported. He hasn’t set a timetable for his departure or spoken with senior colleagues about any plans to step down by the end of the year, a person with knowledge of his thinking told Bloomberg.
Mike Mayo, a bank analyst at Wells Fargo & Co., said the bank has four good contenders as CEO a year from now. In addition to Solomon and Schwartz, Mayo said in a Bloomberg Television interview he’d consider former Goldman president and Trump administration adviser Gary Cohn a candidate, as well as Blankfein, “because it’s not certain he will be gone and we’ve had these reports in the past.”
Goldman Sachs shares briefly dipped but recovered to a 1.4 percent gain at 2:31 p.m. in New York.
Blankfein has stitched together a patchwork of new initiatives: a consumer bank, a heightened focus on lending and more resources for asset management, including a suite of exchange-traded funds. Mostly he has doubled down on the trading and risk-taking that otherwise fell out of favour across much of Wall Street. He’s preached patience to investors while pointing to strong results in the firm’s other businesses, including investment banking.
Blankfein, the son of a postal worker who grew up in a Brooklyn housing project, has become a billionaire from his Goldman Sachs career. He rose through the firm’s trading business and took the top job in 2006 when Hank Paulson left to become Treasury secretary. Much of his work in recent years has been repairing the bank’s image after Congressional hearings and media scrutiny focusing on the firm’s role in the mortgage bond bubble that helped bring about the financial crisis.
The CEO has made several jokes during his tenure about dying at his desk. After making it through his cancer treatments, he said working served as a lovely distraction.
Solomon and Schwartz were appointed to their roles in late 2016 after the firm’s longtime president Gary Cohn left to join Donald Trump’s administration. Cohn announced his departure from the White House earlier this week.
Blankfein’s departure would leave JPMorgan Chase & Co.’s Jamie Dimon as the lone CEO of a major U.S. bank who was at the helm during the financial crisis. Dimon said in January that he’d step down in five years.
Frontpage December 17, 2019