Sidney James (Jimmy) Weinberg, Jr., joined Goldman’s investment banking department in 1965. He worked as a vice president of the textile division at Owens Corning before joining Goldman. From 1978 to 1988, he ran the firm’s investment banking services department, a unit created by former Goldman co-chairman John C. Whitehead to help manage client relationships and win business. Jimmy Weinberg retired from the general partnership in 1988, when he turned sixty-five. He remained a limited partner until the firm went public and then became a senior director. Jimmy Weinberg graduated from Princeton University and Harvard Business School. He served in the Philippines as a first lieutenant in the US Army during World War II. His father was Sidney Weinberg, and John L. Weinberg was his brother. Peter Weinberg is his son, and John S. Weinberg is his nephew.
Senior Partners (Excluding Weinbergs)
Lloyd Blankfein joined Goldman’s commodities trading arm, J. Aron & Co., in 1981, as a precious metals salesman in its London office. He has been chairman and CEO of Goldman since June 2006, when Hank Paulson left to become secretary of the Treasury. Blankfein has served as president and COO of Goldman since January 2004. From April 2002 to January 2004, he was a vice chairman of Goldman, with management responsibility for Goldman Sachs’s FICC and equities divisions. He served as co-head of the FICC division after its formation in 1997. From 1994 to 1997, he headed or co-headed the currency and commodities division. The Financial Times named Blankfein its 2009 Person of the Year. In January 2010, Blankfein testified before the Financial Crisis Inquiry Commission. He testified before Congress in April 2010 at a hearing of the Senate Permanent Subcommittee on Investigations, denying any wrongdoing by Goldman. His father was a clerk with the US Postal Service; his mother was a receptionist. As a boy, Blankfein worked as a concession vendor at Yankee Stadium. He graduated from Harvard College and Harvard University Law School.
Jon Corzine joined Goldman in 1975 to become a bond trader. Corzine took over the firm after Steve Friedman suddenly resigned over health concerns and after Goldman had suffered significant trading losses. Corzine was chairman and CEO of Goldman from 1994 to 1999 and oversaw the conversion of Goldman from a private partnership to a publicly traded corporation. In 1999, having lost a power struggle with Hank Paulson, Corzine left the firm to run for the US Senate, representing New Jersey. He served as senator from 2001 to 2005, when he was elected New Jersey governor, serving from 2006 to 2010. In March 2010, Corzine was named chairman and CEO of MF Global, a financial services firm specializing in futures brokerage. The company filed for bankruptcy protection in October 2011, and Corzine resigned in November 2011. Corzine was subpoenaed to appear before a House committee in December 2011 to answer questions regarding money missing from MF Global client accounts. In school, Corzine had been football quarterback and basketball captain. While in college, he enlisted in the US Marine Corps Reserve and served from 1969 to 1975, attaining the rank of sergeant. He graduated from the University of Illinois and University of Chicago Business School.
Stephen (Steve) Friedman joined Goldman in 1966, helped start the M&A department within investment banking, and became a partner in 1973. In 1984, he ran the fixed income division, together with Bob Rubin. Friedman was vice chairman and co-COO from 1987 to November 1990 with Bob Rubin, and co-senior partner and chairman or senior partner and chairman from 1990 to 1994. Friedman suddenly resigned in 1994 due to health concerns and after Goldman had suffered significant trading losses. He currently serves as chairman of Stone Point Capital. From 1998 to 2002, he served as a senior principal of March & McLennan Capital, an investment arm of the professional services and insurance brokerage firm. From 2002 to 2005, Friedman was assistant to the president for economic policy under President George W. Bush; from 2002 to 2004, he served as director of the National Economic Council. Friedman was on the board of directors of Goldman but resigned in April 2013 when he reached the age limit of 75 years old. In 2009, Friedman resigned as chairman of the Federal Reserve Bank of New York while under criticism for his December 2008 purchase of $3 million in Goldman stock. He graduated from Cornell University, where he was on the wrestling team, and Columbia University Law School.
Gus Levy joined Goldman in 1933 to head the then one-man trading department. Between 1933 and 1969, Levy headed Goldman’s trading department and pioneered new trading strategies. He was senior partner from 1969, succeeding Sidney Weinberg, until his death in 1976. It was thought that, because he was from the trading department, Levy was not naturally banking oriented. According to stories, when he was about to retire in 1969, the highly banking-oriented Sidney Weinberg had reservations about leaving Levy in charge. Ultimately, he appointed Levy as senior partner but also introduced an eight-man management committee composed of seven older, experienced senior banking partners to “supervise” Levy. Gus Levy is credited with coining the phrase “long-term greedy” to describe Goldman’s philosophy.
Henry (Hank) Paulson Jr., joined Goldman in 1974, working in the firm’s Chicago office, after having worked in the Nixon White House. Paulson became a partner in 1982. From 1983 until 1988, Paulson led the investment-banking group for the Midwest region and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of investment banking, then served as COO from December 1994 to June 1998, and eventually succeeded Jon Corzine as chairman and CEO. Paulson pushed Goldman’s growth into Asia and into principal investing activities. In 2006, Paulson resigned from Goldman to become secretary of the Treasury for President George W. Bush. Time magazine named Paulson runner-up for its 2008 Person of the Year. After leaving his role as Treasury secretary, Paulson spent a year at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins as a distinguished visiting fellow. He is a senior fellow at the University of Chicago’s Harris School of Public Policy. In school Paulson was on the wrestling and football teams. He graduated from Dartmouth College and Harvard Business School. He is author of On the Brink: Inside the Race to Stop the Collapse of the Global Financial System (2010).
Robert (Bob) Rubin joined Goldman in 1966 as an associate in the risk arbitrage department in the equities division, a proprietary investing area. He became a general partner in 1971 and joined the management committee in 1980. Rubin ran the J. Aron commodities trading business in the early 1980s. He ran the fixed income division with Steve Friedman in 1984. Rubin was vice chairman and co-COO with Steve Friedman from 1987 to 1990. From the end of 1990 to 1992, Rubin served as co-chairman and co-senior partner along with Steve Friedman. Then Rubin resigned to serve in the White House as assistant to the president for economic policy under President Clinton. Rubin served as secretary of the Treasury during the first and second Clinton administrations. In 1999, he became a director on the board, chairman of the executive committee, senior adviser, and member of the office of the chairman of Citigroup, where he performed advisory and representational roles for the firm. In 2009, he left Citigroup while under criticism that he should have recognized and acted on the extreme circumstances faced by the financial system and Citigroup. Rubin is currently engaged actively as a founder of The Hamilton Project, an economic policy think tank that produces research and proposals for creating a growing economy that benefits more Americans. He is co-chairman of the Council on Foreign Relations and sits on the board of the Harvard Corporation, Harvard University’s executive board. He was a member of Boy Scout Troop 35, sponsored by the American Legion, and received the rank of Eagle Scout. In 1960, Rubin graduated from Harvard College and Yale Law School. He is coauthor, with Jacob Weisberg, of In an Uncertain World: Tough Choices from Wall Street to Washington (2003).
John C. Whitehead joined Goldman in 1947. He was co-senior partner with John L. Weinberg from 1976 to 1984, succeeding Gus Levy after Levy died. Whitehead codified Goldman’s principles in 1979. He also set up the investment banking services department to help manage client relationships, win business, and reduce the firm’s reliance on any one individual. Both were innovations
for Wall Street. He helped focus the firm on international growth. He retired in 1984 to serve as deputy secretary of state, under George Shultz, in the Ronald Reagan administration, from 1985 to 1989. Whitehead is currently a board member of the World Trade Center Memorial Foundation and, until his resignation in May 2006, was chairman of the Lower Manhattan Development Corporation. Whitehead graduated from Haverford College and Harvard Business School and is author of A Life in Leadership: From D-Day to Ground Zero: An Autobiography (2005).
Selected Current/Recently Retired Executives
Gary Cohn has been president and COO (or co-COO) and on the board of directors of Goldman since June 2006. From December 2003 to June 2006, he was co-head of global securities businesses, having been co-head of FICC since September 2002. Before that, he served as co-COO of FICC after having been responsible for commodities and a number of other FICC businesses from 1999 to 2002. Cohn was head of commodities from 1996 to 1999. In 1990, Cohn was hired by Goldman Sachs’s J. Aron & Co. unit as a metals trader which traded commodities and currencies; he traded silver. Lloyd Blankfein became co-head of J. Aron in 1994, and two years later he tapped Cohn as global head of the commodities businesses. Cohn graduated from American University.
J. Michael Evans has been global head of growth markets since January 2011, a vice chairman of Goldman since February 2008, and chairman of Goldman Sachs Asia Pacific since 2004. Before becoming a vice chairman, he had served as global co-head of Goldman’s securities business since 2003. Previously, he had been co-head of the equities division. Evans joined Goldman in 1993, from Salomon Brothers, as head of equity capital markets in London. He was named a Goldman partner in 1994, and he became head of the business standards committee. Evans was part of the Canadian Olympic team in 1984 and won a gold medal in eight-man rowing crew. Evans graduated from Princeton in 1981 and attended Oxford University from 1982 to 1984 for his graduate studies.
Harvey M. Schwartz has been the chief financial officer of Goldman since January 2013. From 2008 to 2013, he was global co-head of the securities division. From 2005 to 2008 he was involved in executive sales positions in the securities division. From 2004 to 2005, he was co-head of the Americas Financing Group. He started at Goldman’s J. Aron & Co. unit in 1997 as a gold salesman. Prior to Goldman, he worked at J.B. Hanauer & Co, First Interregional Equity Corp., and Citicorp. He graduated from Rutgers in 1987 and Columbia University Business School in 1996.
David A. Viniar had been the chief financial officer of Goldman from 1999 until January 2013. Viniar was also head of the operations, technology, finance, and services division. He was a member of the management, firmwide risk, finance, firmwide capital, and principal investment committees. From 1998 until 1999, Viniar was deputy CFO. He assumed responsibility for the firm’s financing activities in the treasury department in 1992 and for the controllers department in 1994. Before that, he was a member of the structured finance department of the investment banking division. He joined Goldman’s investment banking area in 1980 and became a partner in 1992. He graduated from Union College, where he played basketball, and from Harvard Business School.
Selected Former Partners Mentioned
Rob Kaplan served as vice chairman of Goldman, with oversight responsibility for the investment banking and investment management divisions. He was also a member of the firm’s management committee and served as co-chairman of the firm’s partnership committee and chairman of the Goldman Sachs Pine Street Leadership Development Initiative. During his career at the firm, Kaplan served in various other capacities, including global co-head of the investment banking division (1999–2002), head of the corporate finance department (1994–1999), and head of Asia-Pacific investment banking (1990–1994). He became a partner in 1990. Since 2005, Kaplan has taught at Harvard Business School. Kaplan graduated from the University of Kansas and Harvard Business School. He is the author of What to Ask the Person in the Mirror: Critical Questions for Becoming a More Effective Leader and Reaching Your Potential (2011) and What You’re Really Meant to Do: A Road Map for Reaching Your Unique Potential (2013).
John Thain was president and COO of Goldman from 1999 to 2005. He was co-president and co-COO with John Thornton from 1999 to 2003. During his Goldman career, Thain also served as chief financial officer and head of operations, technology, and finance. He was co-head of European operations from 1995 to 1997 and was head of the mortgage group from 1985 to 1990. After leaving Goldman, Thain served as chairman and CEO of the New York Stock Exchange and then Merrill Lynch, before it merged with Bank of America. Currently, he is chairman and CEO of CIT Group. He was considered a protégé of Corzine’s, although the relationship suffered when Thain supported Paulson’s taking over the firm. Thain and John Thornton were widely expected to co-run Goldman. Thain graduated from MIT and Harvard Business School.
John Thornton served as co-president and co-COO of Goldman from 1999 to 2003. He retired in 2003 after more than twenty years at the firm. Thornton served as co-CEO of Goldman Sachs International, Goldman’s business in Europe, the Middle East, and Africa. From 1998 to 1999, he held oversight responsibility for international operations. From 1995 to 1997, he served as a co-CEO for European operations and was chairman of Goldman Asia from 1996 to 1998. Thornton joined Goldman in 1980 and was elected partner in 1988. He set up Goldman’s M&A department in London in the early 1980s. He imported hard-nosed US investment banking techniques into what had been a conservative and traditional M&A environment in London. Thornton helped drive Goldman’s growth into Europe and Asia and was the first non-Chinese full professor at Tsinghua since the Communist revolution. He is chairman of the board of the Brookings Institution and co-chairman of Barrick Gold. Thornton graduated from Harvard College, where he played tennis. He holds bachelor’s and master’s degrees in jurisprudence from Oxford University and a master’s degree in public and private management from the Yale School of Management.
Appendix G
Goldman Timeline of Selected Events
Following is a timeline summarizing selected key events for Goldman and its industry. Although the timeline covers events starting in 1869, the book starts its analysis from 1979, when the business principles were codified. The timeline goes through most of 2012. In order to help demonstrate that pressures started impacting the firm before its IPO in 1999 and before Blankfein took over as CEO, the events are categorized in terms of the analytical framework used for the analysis in the book.1
As discussed in appendix B, the framework categorizes four main pressures (or responses to those pressures) that impact an organization: organizational (O), regulatory (R), technological (T), and competitive (C). Although many events may apply or occur in response to multiple pressures, for simplicity in this timeline I use “O,” “R,” “T,” or “C” to indicate what I believe was the primary set of factors at work. It is challenging to precisely characterize each event. Also, I may inadvertently have missed selected events.
1869: Marcus Goldman moves to New York and starts selling promissory notes (early commercial paper) from a one-room office on Pine Street.
1882: Samuel Sachs, Goldman’s son-in-law, joins the business.
1885: The firm becomes a general partnership, Goldman Sachs & Company.
1896: The company joins the New York Stock Exchange.
1900: Goldman’s first branch office opens in Chicago.
1904: The firm’s capital reaches $1 million.
1906: Goldman co-manages its first IPO for one of its clients, United Cigar Manufacturers. The same year, Goldman handles the initial equity sales for Sears, Roebuck, pioneering the IPO business.
1907: Walter Sachs (grandson of Marcus Goldman) joins the firm as a commercial paper salesman. Sidney Weinberg is hired as assistant janitor.
1909: Marcus Goldman dies, and Henry Goldman leads the firm.
1910: Goldman now has a few partners, all members of the Goldman or Sachs families.
1917: Henry Goldman’s pro-German stance causes a r
ift between the Goldman and Sachs families. Henry Goldman retires and withdraws his capital. Sidney Weinberg leaves to serve in the US Navy during World War I.
1920: Sidney Weinberg returns to Goldman as a bond trader.
1925: Weinberg buys a seat on the NYSE with money from his own earnings, not from trading.
1927: Weinberg becomes only the second partner from outside the Goldman and Sachs families.
1929: Waddill Catchings, who joined the firm eleven years earlier to head up underwriting, holds the largest single percentage in the partnership and takes over leadership. He pushes for the creation of Goldman Sachs Trading Corporation, a collection of highly leveraged investment trusts. When the stock market collapses, Goldman Sachs Trading Corporation suffers heavy losses, and Goldman’s reputation is severely damaged.
1930: After devastating trading losses, Catchings is forced to resign. The Sachs brothers name Sidney Weinberg senior partner. Weinberg takes over leadership of Goldman and builds its investment banking operation. The Sachs family covers the partners’ losses. Goldman will not reenter the asset management business again for nearly forty years.
1933: Weinberg organizes the Business and Advisory Council for President Franklin D. Roosevelt, creating a bridge between business and government during the New Deal. Congress passes the Securities Act of 1933, creating the Securities and Exchange Commission. The Banking Act of 1933, known as the Glass–Steagall Act, is passed, prohibiting commercial banks from engaging in investment activities.
1937: Sidney Weinberg’s percentage of the partnership has tripled since 1927 and stands at 30 percent.
1942: Weinberg takes a leave from the firm and enters government service as assistant to the chairman of the War Production Board, forming relationships with America’s top executives, many of whom will later become Goldman clients.
1945: At the end of the war, Weinberg resigns from government service.
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