- The Washington Times - Tuesday, May 30, 2006

NEW YORK (AP) — Goldman Sachs is widely expected to choose its next chief executive from within, and the most likely candidate is its president and chief operating officer, Lloyd Blankfein.

“I would be shocked if it wasn’t an internal candidate, and I would be slightly less shocked if it wasn’t Lloyd Blankfein,” said Jeffery Harte, an analyst at Sandler O’Neill & Partners LP. Mr. Harte said the ascension of Mr. Blankfein would mean little change ahead for the storied Wall Street investment bank.

Goldman’s current chairman and CEO, Henry M. Paulson, was nominated yesterday by President Bush to replace John W. Snow as Treasury secretary.

A spokesman for the Goldman Sachs Group Inc., Peter Rose, declined to say whether the board of directors was meeting yesterday or how soon an announcement of a successor to Mr. Paulson may be made.

“The decision on who succeeds Hank as CEO is up to the Goldman Sachs board of directors,” he said. “It’s inappropriate and premature to comment. However, we have a very deep bench of senior management, all of whom have worked together as colleagues for decades.”

Mr. Blankfein has been president since January 2004 and has been a director since April 2003. Prior to that, he was a vice chairman overseeing the Fixed Income, Currency and Commodities Division and the Equities Division.

Two other big Wall Street houses, Morgan Stanley and JPMorgan Chase & Co., also have had new chief executives start within the last year.

At Morgan Stanley, John Mack returned after a hiatus to take the top post as its board of directors forced out Philip Purcell. Mr. Mack was elected to the top post June 30. At JPMorgan Chase, James Dimon was promoted to be CEO in December after serving as president and chief operating officer.

Under Mr. Paulson, Goldman has arguably become the premier investment banking company on Wall Street. Its huge successes have included mergers, acquisitions and underwriting; strong earnings in fixed income and commodities trading, and a steady increase in the assets it has under management.

In the first quarter, the company’s profits surged 62 percent to $2.45 billion on record revenue of $10.34 billion. That was on top of record earnings of $5.61 billion on revenue of $24.78 billion in 2005.

Goldman stock fell $3.11, or 2 percent, to close at $149.83 on the New York Stock Exchange yesterday. It has ranged between $94.75 and $169.31 over the past 52 weeks.

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