--Goldman CFO David Viniar to retire at the end of January; to
be replaced by securities division veteran Harvey Schwartz
--Move could suggest a period of calm for Goldman, analyst
says
--Executives don't "expect any material changes in the way we
want to operate the business" despite the transition
(Adds background on current and incoming CFOs, comment from
executives and analysts throughout.)
By Brett Philbin and Ben Fox Rubin
Goldman Sachs Group Inc. (GS) said Chief Financial Officer David
Viniar, the securities firm's only finance chief as a public
company, will retire at the end of January. He will be replaced by
Harvey Schwartz, global co-head of its securities division, in a
move that may signal a new era of relative calm after a period of
historical tumult for the firm.
Mr. Viniar, a 32-year Goldman Sachs veteran and the longest
tenured CFO at any major Wall Street bank, helped steer Goldman
Sachs through its early post-IPO years and the financial crisis of
2008. He is perhaps best known as the executive who takes center
stage on quarterly conference calls with investors, answering
questions and discussing the company's financial performance.
Goldman went public in May 1999.
On a call to announce his retirement and Mr. Schwartz's
appointment late Thursday, Mr. Viniar, who always chooses his words
carefully, said it was "time for me to contribute to the firm in
other ways and give others the opportunity to lead."
The move, though, could be an indication that Mr. Viniar expects
less calamitous times ahead for Goldman, which--like many
banks--has been grappling with volatile markets, muted
capital-markets activity, litigation and sweeping regulatory
changes.
Mr. Viniar, who had previously told analysts he'd only consider
leaving when an environment of relative serenity was apparent,
played down such a characterization, saying: "I've been here for 32
years it's never been boring."
In a note to clients, however, Meredith Whitney, chief executive
of Meredith Whitney Advisory Group LLC, said, "we view the
departure of Goldman's CFO, David Viniar, as a signal that relative
calm has arrived for Goldman Sachs."
Ms. Whitney also said, "we do not view Viniar's replacement as
the newsworthy item; rather it is the ceremonial passing of the
torch from the trusted hands of a 12-year serving CFO to the new
40-something year old generation of leaders, a noteworthy event in
Goldman Sachs' short history as a public company."
Shares of Goldman Sachs fell 0.3% to $119.58 in after-hours
trading. The stock has climbed 33% year-to-date amid a recent rally
in the financial services sector.
Mr. Schwartz, an experienced risk manager, will take on Mr.
Viniar's responsibilities, including oversight of operations,
technology and finance.
On the conference call, Mr. Schwartz said Goldman Sachs has no
plans to split up those duties, while Mr. Viniar said the firm
would remain focused on liquidity and capital.
Upon his retirement, Mr. Viniar will join the company's board as
a nonindependent director, becoming the third Goldman Sachs insider
in the group. In a statement, the company said it plans to appoint
more independent directors to its board in the near term. With Mr.
Viniar's appointment, the board will grow to 11 members, eight of
them independent.
Mr. Viniar has had some colorful moments at Goldman Sachs, most
notably his testimony at a 2010 hearing to discuss an inquiry
related to a subprime mortgage product, known as Abacus, and
practices during the financial crisis.
When asked his thoughts on employees saying "what a (expletive
deleted) deal, God what a piece of crap," Mr. Viniar said "I think
that's unfortunate to have on email."
Goldman Sachs paid $550 million to regulators to settle charges
it misled clients in the deal. The U.S. Justice Department, which
had launched an inquiry into the notorious transaction, said it
wouldn't bring criminal charges against the firm earlier this
year.
On the call Tuesday, Mr. Schwartz said Goldman expects a smooth
transition period, noting that the firm doesn't "expect any
material changes in the way we want to operate the business."
Mr. Schwartz joined the investment bank as a vice president in
1997, became a managing director in 1999 and was named partner in
2002.
In a statement, Goldman Chief Executive Lloyd Blankfein said Mr.
Schwartz has "deep experience in credit, liquidity, market and
operational risk," adding that Mr. Schwartz's "risk management
judgment and broad understanding of our business and our clients
have defined his career and will be the basis of his strengths as
an effective CFO."
Prior to becoming global co-head of the securities division, Mr.
Schwartz was global head of securities division sales, where he
helped oversee the business's relationships with clients including
corporations and asset managers.
Mr. Viniar, who was routinely one of Goldman's highest-paid
executives, received $15.8 million in compensation for 2011, a
period in which the securities firm had its least-profitable year
since the depths of the financial crisis.
He joined Goldman about 32 years ago and has been head of the
operations, technology, finance and services division since
December 2002. He was head of the finance division and co-head of
credit risk management and advisory and firm-wide risk from
December 2001 to December 2002.
Goldman's traditionally strong trading and investment banking
arms have been struggling for the past couple of years as investors
have shied away from making big bets in the markets and corporate
chiefs hoard cash instead of making deals. Announced mergers in the
second quarter were at the lowest level since the third quarter of
2009, according to Dealogic.
In July, the company said its second-quarter profit fell as
sluggish demand for deal making put a damper on investment banking
revenue.
Write to Brett Philbin at brett.philbin@dowjones.com