Background and career
Lloyd Craig Blankfein (born 20 September 1954) is an American billionaire investment banker who has served as senior chairman of Goldman Sachs since 2019, and chairman and chief executive officer (CEO) from 2006 until the end of 2018. Before leading Goldman Sachs as CEO, he was the company's president and chief operating officer (COO) from 2004 to 2006, serving under then-CEO Henry Paulson. Born and raised in New York City, Blankfein attended Harvard University for his undergraduate and law school studies before briefly entering private law practice. In 1982, he became a precious metals salesman at J. Aron & Co., a small commodities trading firm which was acquired by Goldman in 1981. After leading Goldman's currency and commodities divisions from 1994 to 1997 he was named heir apparent. He served as the president and chief operating officer from 2004 to his ascension to chief executive. Almost immediately after Blankfein assumed the head of the company, the 2008 financial crisis affected the banking industry. His role in handling the crisis was widely praised and criticized by media outlets, making him a public figure. After the Federal Reserve implemented dovish monetary policies and the U.S. Treasury bailed out the company, Blankfein took advantage of low interest rates to undercut competition from other investment banks and established Goldman Sachs as the second largest investment bank in the U.S. as others either went bankrupt or fell to acquisition. Blankfein was twice named one of the most influential people in the world by Time magazine and won the Financial Times Person of the Year award in 2009. According to Bloomberg News, his net worth is estimated to be US$1.1 billion as of July 2015. His salary at Goldman Sachs in 2018 was estimated to be $24 million.
Lloyd Craig Blankfein was born in the Bronx borough of New York City to a low-income Jewish family on September 20, 1954. His father, Seymour Blankfein, was a clerk with the U.S. Postal Service branch in Manhattan and his mother was a receptionist. He was raised in the Linden Houses, a housing project in the East New York section of Brooklyn. He received primary and secondary education in New York City's public schools graduating valedictorian at Thomas Jefferson High School in 1971. He went on to attend Harvard College where he lived in Winthrop House and graduated with a B.A. in history in 1975. After graduating college, he attended Harvard Law School where he received a J.D. degree in 1978. Blankfein first worked for the law firms Proskauer Rose and then Donovan, Leisure, Newton & Irvine. In 1982, he joined the commodities trading firm J. Aron & Co. as a precious metals salesman in its London office, after J. Aron was acquired by the investment bank, Goldman Sachs.
Blankfein joined J. Aron & Co. in 1982, after it had been acquired by Goldman Sachs in 1981. When then chairman Stephen Friedman appointed Henry Paulson as his successor, Blankfein was soon tasked with managing or co-managing the company's currency and commodities divisions from 1994 to 1997. After Paulson consolidated control of Goldman, he identified Blankfein as his heir apparent, despite Blankfein ranking third in the corporate hierarchy behind two co-presidents. In 2004, Blankfein was promoted to president and chief operating officer, a position he served in until June 2006. As president, he oversaw the 2000s commodities boom and positioned Goldman to take advantage of rising commodity prices. On May 30, 2006, U.S. President George W. Bush nominated Paulson to serve as the 74th United States Secretary of the Treasury which prompted Paulson to establish a succession plan. Shortly after Paulson was sworn in, Blankfein was asked to serve as chairman and chief executive officer in July 2006.
During the 2008 financial crisis, many financial institutions that had dealings in subprime mortgages received a high level of public attention. Goldman Sachs served as a market maker that dealt with financial products that held subprime mortgages. During late 2008, the crisis led the Federal Reserve to lower interest rates and the U.S. Treasury to increase public spending in private banks. In 2009, he was named Financial Times Person of the Year. His citation noted that "his bank stuck to its strengths, unashamedly [took] advantage of the low interest rates and diminished competition resulting from the crisis to make big trading profits." On January 13, 2010, Blankfein voluntarily testified before the Financial Crisis Inquiry Commission that he considered Goldman Sachs's role as primarily market maker, not a creator of the product (i.e., subprime mortgage–related securities). Blankfein testified once more before Congress in April 2010 at a hearing of the Senate Permanent Subcommittee on Investigations. He said that Goldman Sachs had no moral or legal obligation to inform their clients they were betting against the products they were selling to them because it was not acting in a fiduciary role. Senator Carl Levin accused Blankfein of misleading Congress; however, no perjury charges were brought against Blankfein. Nevertheless, as a precaution Blankfein hired Reid Weingarten, a high-profile defense lawyer who represented former WorldCom CEO Bernard Ebbers and former Enron accounting officer Richard Causey. Two months later, after the publicity of the testimony increased his public status, he was listed as #43 on Forbes Magazine's List of The World's Most Powerful People in November 2011.
On March 14, 2012, Greg Smith, a former Goldman executive, wrote a widely circulated op-ed for The New York Times titled "Why I Am Leaving Goldman Sachs", in which he heavily criticized the firm's top leadership and Blankfein in particular for sidelining the interests of the client. Smith claimed that employees were promoted for unloading less profitable products on clients, for trading products that maximized Goldman Sachs' profits, not their clients, and trading illiquid, opaque products. Smith's op-ed was criticized by many, particularly because he worked at Goldman for 12 years before deciding to quit because of moral objections.
In February 2018, to counter low sales and trading profits, Blankfein instituted new hiring priorities. He instructed human resource managers at the firm to focus on employment candidates who were "strategists" or "strats," i.e., highly quantitative and technologically proficient. On March 15, 2018, Blankfein issued an internal memo advocating for complete gender parity among its workforce. He stated: "At Goldman Sachs we pay women and men in similar roles with similar performance equally. However, the real issue for our firm and many corporations is the under-representation of women and diverse professionals both in magnitude and levels of seniority. We have made some progress, but we have significant work to do, and we, as leaders of our firm, are committed to doing this critical work."
