Paulson Pushing to Split Goldman Presidency?

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Although Lloyd Blankfein has been named the successor to outgoing Goldman Sachs chairman and CEO Hank Paulson, the matter of who will replace Blankfein in his current role as Goldman’s President, the second highest position at the firm, remains an open question. It has been widely assumed that Blankfein would name Gary Cohn, a longtime friend who comes from the same trading division of Goldman as Blankfein, to the number two spot.
This morning CNBC’s Charles Gasparino reported that Hank Paulson, nominated to be the next Treasury secretary, remains active in the debates about who will lead the firm after his departure, and is pushing for a co-presidency that would split the number two role between the trading and investment banking sides of Goldman. Gasparino’s sources named Jon Winkelreid and J. Michael Evans as possible co-presidents to join Cohn.
So who are these guys? And why the push to split the presidency? And how is this connected to September 11?
More after the jump.


Cohn (pictured left), 45 years old, runs fixed income and equities the Americas, and formerly ran the energies trading division. He joined Goldman's through its J. Aron & Co commodities unit. Blankfein also comes from J. Aron. Cohn, and the two are considered to be close allies. In 2002 he became the Chief operating officer for the fixed income division. Cohn graduated in finance from American University's Kogod School of Business in Washington, DC.
Winkelreid (pictured left}, 46, runs the investment banking division with Scott Kapnick. He joined the firm in the same year as Blankfein, working as an investment banker. Later he went on to start the fixed-income group for Europe, which he ran with Blankfein. He is, however, considered to be a product (some same partisan) of investment banking. Winkelreid has an MBA from Chicago.
Evans, 48, is the chairman of Goldman Sachs Asia and a co-leader of global sales and trading. He came up through the firm a capital markets banker after moving from Salomon brothers. He went to Princeton and Oxford. A friend at Goldman tells us that when Hank Paulson was stranded in Asia immediately after the September 11, 2001 terrorist attacks, it was Evans who arranged for Paulson to be on one of the first planes allowed to fly into the U.S.
(There are a lot more background details on Cohn, Winkelried and Evans in the Bloomberg and New York Times stories below.)
So those are the players. Why the push to split the presidency? Various news accounts describe it as a "power struggle" between investment banking and trading at Goldman, or an attempt to "check the power of Blankfein." But this is banking, so when you read "power" you have to think "money."
Apparently some on the investment banking side at Goldman are concerned that a leadership dominated by the traders could tilt compensation in favor of the traders. This concern could lead to defections to other banks by investment bankers, which in turn could result in the loss of client relationships. Even some traders are concerned that investment banking defections could hurt the performance of Goldman, ironically reducing their own compensation. A co-presidency, split between a trader and an investment banker, might ease these concerns.

Goldman's choice: One head or two?
[New York Times in the International Herald Tribune]

Goldman Record Second Quarter Shadowed by Blankfein Successors
[Bloomberg]

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