Goldman's Viniar `Not Aware' of Any Plans for CEO Change

David Viniar, Goldman Sachs Group Inc.’s chief financial officer, said he’s “not aware of any discussions” about changing the chief executive officer or chief operating officer after the firm agreed to a record- setting settlement with U.S. regulators.

Some investors and analysts have speculated that CEO Lloyd Blankfein, 55, and Gary Cohn, 49, who serves as president and COO, may step down in coming months as the New York-based company attempts to overcome reputational damage from the Securities and Exchange Commission’s fraud lawsuit.

“They must know something I don’t,” Viniar, 55, said in a telephone interview today after the bank reported an 82 percent drop in second-quarter profit. He added that “obviously I wouldn’t tell you if we were having board discussions about those things.”

Christopher Whalen, a former Federal Reserve Bank of New York official and co-founder of Institutional Risk Analytics, said after the settlement last week that Blankfein would probably leave “within a decent interval” in order to help repair the company’s reputation.

Charles Peabody, an analyst at Portales Partners LLC, said last week that he expects Blankfein and Cohn to be gone before the end of next year.

They will “choose a time where they can exit in a manner that it’s not tied to the SEC issue and in a manner where they can walk out with good news on their hip,” Peabody said.

Goldman Sachs, which has lost 12 percent on the New York Stock Exchange this year, gained $2.70 to $148.38 in composite trading at 2:27 p.m.

Partner Departures

Goldman Sachs, which had about 400 partners after the firm last named new members to the partnership in 2008, will probably see defections before the end of the year because 15 percent to 20 percent of the partners leave every two years, Viniar said. He estimated that about half of the 60 or 80 partners that would be expected to leave have already gone.

“There are going to be partners who retire,” Viniar said. “I don’t know who they are, there’s no one who’s being talked about, there’s no one who’s talking about it. But I am sure that between now and the end of the year there will be partners who retire.”

The amount of money set aside for compensation in the first half of the year dropped 18 percent even as the total number of employees climbed 9 percent.

New Legislation

The firm hasn’t had any “large amounts” of people leaving because of new legislation that will affect businesses including proprietary trading and the special-situations unit, Viniar said.

That “doesn’t mean it won’t happen in the future but we’re not seeing it now,” he said.

Goldman Sachs agreed last week to pay $550 million to settle the SEC’s April 16 lawsuit, which accused the firm of defrauding investors in a collateralized debt obligation sold in 2007. A new financial regulation law that was passed by the U.S. Senate last week will probably force changes on Goldman Sachs’s derivatives-trading business and divisions that invest the company’s own money.

Viniar, who joined Goldman Sachs in 1980, said he remains happy at the firm. “I am here because I love Goldman Sachs and I love what I do,” he said.