--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 [email protected]