Goldman Sachs CEO Lloyd Blankfein is cordial but sniffly
JERSEY CITY, New Jersey
JERSEY CITY, New Jersey (Reuters) - Goldman Sachs Group Inc Chief Executive Lloyd Blankfein was in good spirits on Friday at his firm's annual meeting, despite battling some testy shareholders and what seemed to be a cold.
The Wall Street chieftain sipped water and blew his nose through the two-hour proceedings, and declined to shake one investor's hand after the meeting for fear of spreading germs.
But while Blankfein might have preferred chicken soup over the continental breakfast on display, his demeanor remained strong and, some might say, resilient.
After weeks of questions in press reports about his future, the 56-year-old head of Wall Street's most powerful investment bank put to rest any speculation that he might soon be stepping down because he was tired after leading Goldman through the financial crisis and its aftermath.
Blankfein said any suggestion that he is about to leave Goldman Sachs is "all made up."
The U.S. Securities and Exchange Commission charged Goldman with civil fraud last year over a derivative deal at the height of the financial crisis. Goldman settled those charges for $550 million in July, but faced renewed scrutiny recently following a scathing report from a Senate committee. The Justice Department is now considering the matter.
"We are very mindful of the stresses and strain that led to the financial crisis and have no desire to go back to that place," Blankfein said at Goldman's towering office building in Jersey City, New Jersey.
Goldman's chief counsel, Gregory Palm, told shareholders the firm spent more than $700 million on legal costs last year. It has also hired more lawyers, with 286 working full time for Goldman now, versus 252 a year ago.
There were a few tense moments during the meeting as shareholders criticized pay packages, political contributions and even Goldman's activities related to climate change.
But, for the most part, the atmosphere was cordial and Blankfein spent a good deal of the meeting engaged in light banter with a handful of somewhat eccentric shareholders.
Among those launching attacks at Blankfein were a nun, the head of a Jewish social activist group, renewable energy advocates and two gadflies, Evelyn Davis and Harry Korba.
Davis, who has built a reputation for getting under executives' skin, spent the first portion of the meeting demanding Blankfein's resignation and comparing him unfavorably to his predecessor, Henry Paulson.
But, she assured Blankfein, "I really don't dislike you. You're not a bad-looking guy."
Blankfein furrowed his brow and twisted his lips into a smirk as Davis said her piece. At one point, he corrected her to point out that Goldman's share price reached its height of above $250 under his tenure, not Paulson's.
"It happened after Hank left, but who is counting these things?" he scoffed.
SHAREHOLDER PROPOSALS DEFEATED
Goldman has taken some heat for awarding Blankfein a $5.4 million bonus for 2010 despite a share price decline of 38 percent. His overall compensation rose to $14.1 million from $1 million the previous year.
Nonetheless, proposals to restrict executives' ability to sell stock compensation and to issue a report examining compensation practices both failed, with 20.6 percent and 4.1 percent approval, respectively.
Shareholders approval of executives' 2011 compensation packages declined to 73 percent of the vote from 96 percent a year ago, but still had a significant majority.
In a preliminary vote count, each of Goldman's directors won re-election, with more than 90 percent of votes. None of the six shareholder proposals that made it onto the proxy gained enough support to pass.
The meeting was more sparsely attended than usual, with about 135 people in a large conference room. They munched on bagels, croissants and fruit from the breakfast spread, with some drinking coffee or water.
Discussing the event briefly with reporters, Blankfein joked that if "aliens came down from outer space" and only got a chance to see the cast of characters at Goldman's annual meeting, they would have a distorted view of the human race.
Blankfein has spent 25 years at Goldman Sachs and been in his current role since mid-2006. Corporate governance experts and analysts have said that it would not be unusual for a CEO to move on after a five-year term.
Yet some observers point out that Blankfein might want to make sure Goldman's reputation is more fully restored - and its share price more fully recovered - before he departs.
The stock is more than three times above its crisis low, but is more than 2 percent below what it was when Blankfein took the reins. It closed down 0.20 percent at $150.10 on Friday.
A reporter asked Blankfein why he wanted to remain in his position as chairman and CEO of a company that gets so much scrutiny.
He quipped, "And give up all this?"
(Reporting by Lauren Tara LaCapra; Editing by John Wallace and Tim Dobbyn)