Report: Lloyd Blankfein May Be On His Way Out At Goldman
Fortune magazine is reporting that Goldman Sachs (NYSE: GS) Chief Executive Lloyd Blankfein may step down as early as this summer. Current President and Chief Operating Officer Gary Cohn is apparently the top candidate to replace him. Goldman shares are up around 1% on Tuesday in the wake of the report, possibly in part to Cohn's solid reputation on Wall Street.
"He rose through the ranks at the firm as a trader, along with Blankfein; but over the last 17 years or so he has become a top manager. All of the firm's key business heads report to Cohn. He has also emerged as a global ambassador for the bank," reports Fortune's Katie Benner. She also told CNBC on Tuesday that "[Blankfein] would like to keep his job for much longer," but that the board of directors is pressuring him to step down.
"They would love to see a change at the top. They are thinking about life after him. If we see him stay beyond the end of this year, then he has prevailed over the board," she said. This news does not come as a total surprise, and some observers have said that Blankfein should have been gone a long time ago. Goldman's reputation was severely tarnished in the wake of the financial crisis, and the firm's public relations have been a disaster under Blankfein.
In July 2010, the firm agreed to pay $550 million to settle federal fraud charges which accused Goldman Sachs of misleading investors in subprime mortgage products. Blankfein also garnered considerable bad press for the firm in November 2009, during the heart of the Wall Street meltdown, when he told London's Sunday Times that he was 'doing God's Work" at Goldman Sachs - a totally ridiculous and asinine comment.
Despite his missteps, the pressure on Blankfein to step down likely has less to do with his job performance and is more a result of a superseding need for Goldman to re-brand itself and repair its image in the wake of the financial crisis. Unfortunately for him, Blankfein has become a symbol of Wall Street greed and self-righteousness, whether it is deserved or not.
He has been the public face of the firm, and a combination of his own personal mistakes along with a very difficult set of circumstances, could usher him out the door before he is ready, according to Fortune. The real surprise, however, is that it hasn't already happened. While history may look back on Lloyd Blankfein's tenure favorably in light of the circumstances he was dealing with, there is little doubt that the Goldman brand and franchise would be better off moving forward under new leadership.
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