As Goldman Sachs battles SEC fraud charges, the bank is reportedly considering dumping CEO Lloyd Blankfein. According to the Wall Street Journal, current and former executives of the firm are having "informal" discussions about cleaning out Goldman's top level management, including Blankfein. The controversial chief executive, who faced a Senate panel last week, has become a high-profile target of public anger — for instance, over his recent comment that the wealthy Wall Street firm was "doing God's work." Can he survive? (Watch a Fox Business report about Lloyd Blankfein's future)
The CEO's got to go: Blankfein might not be to blame for the "reputational damage" to Goldman, says Henry Blodget at Forbes. But he has become permanently associated with it. If the bank wants to acknowledge it "behaved abominably" and prove to the SEC it is cleaning up its act, "there's no better way to illustrate that than sacking the guy at the top."
"Blankfein is toast"
History is on his side: Look at the history of Wall Street, says James Sterngold in Business Week, and you'll see "the biggest financial firms rarely depose their leaders." Chief executives have only been forced out "when they were personally involved in improprieties or if the misdeeds were systematic." Unless Goldman is criminally charged, Blankfein's job seems safe.
"Fraud-tarred finance firms trail may mean Blankfein keeps job"
So is market confidence: The market is still worried about Goldman's SEC charges, says Ryan McCarthy at the Huffington Post, but it is becoming more confident Blankfein will stay. Intrade, which allows users to bet on current events, says there's only a "30 percent chance that Blankfein will resign this year." The odds dropped from 50 percent after his appearance in front of a Senate panel last week.
"Markets think Goldman Sachs is more risky than Citi — and that Blankfein will stay"
He should stay, but bring in a new face for the company: Blankfein has been an "excellent manager" of Goldman, say Rob Cox and Christopher Hughes in The New York Times. But he is clearly in the "cross hairs of legislators, regulators and the public." He should allow a new non-executive chairman to take over as Goldman's public face, then get back to what he does best: "Running Goldman Sachs."
"A call to separate top Goldman jobs"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How U.S. special forces are preparing for the worst-case scenario in North Korea
- Why you shouldn't eat dog. Not even once.
- Here's the schedule very successful people follow every day
- I hate Ayn Rand — but here's why my fellow conservatives love her
- What would a U.S.-Russia war look like?
- The danger of the Democrats' lack of desperation
- 7 grammar rules you really should pay attention to
- How social conservatives became a minority in need of protection
- The secret to Gabrielle Hamilton's amazing grilled cheese sandwiches
- 7 language habits that reveal your age
Subscribe to the Week