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Goldman Sachs Annual Meeting: A Showdown With Shareholders

Embattled investment bank Goldman Sachs hosted its annual shareholder meeting this morning in downtown Manhattan. As expected, Lloyd Blankfein, Goldman Sachs’ chairman and chief executive officer, faced a litany of questions from shareholders. Prior to the meeting, dozens of protesters lined up outside of Goldman’s office building, holding signs that spelled the words, “Greed” and “Financial Reform Now.”

“I recognize that this is an important moment in the life of this institution,” Blankfein said during the actual meeting, adding that he had “no current plans” to step down as the leader of Goldman Sachs. Blankfein also tells the crowd that Goldman understands there is a disconnect between how the company views itself and how Goldman is viewed in the public’s eye.

Goldman Sachs’ stock has fallen more than 23% since the Securities and Exchange Commission (SEC) filed fraud charges against the company on April 16. In its complaint, the SEC accuses Goldman and employee Fabrice Tourre of defrauding investors in the sale of securities tied to toxic mortgages. Goldman Sachs also is facing a criminal investigation, according to numerous news reports.

During questioning by the Senate’s Permanent Subcommittee on Investigation, emails came to light that showed Goldman Sachs employees refer to the securities the bank created and sold to investors as “junk.”

Meanwhile, the agenda for Goldman’s annual meeting – which was standing room only – included a number of shareholder proposals. Among them: executive compensation, collateral increases for derivatives trading and splitting the chairman/CEO position. On the latter issue, three other banks – Bank of America, Citigroup and Morgan Stanley – have, in fact, split the chairman and CEO roles.

The Wall Street Journal provided live blogging of Goldman’s annual meeting. Among the highlights:

  • A shareholder states that Goldman Sachs bonuses have “contributed to a culture of greed.”
  • Blankfein comments that the recent Senate hearing “was not the most comfortable moment in my life.”
  • An asset manager from Boston says the chairman split is “very important to regain credibility.” Another shareholder suggests that Blankfein step down at the end of the month.
  • To no surprise, Blankfein firmly rejects the notion of resigning from Goldman. “I will not be stepping down Monday,” he says.
  • Jesse Jackson states that “Wall Street is rising. Citizens are sinking.”

In other Goldman Sachs news, the New York Times reports that American International Group (AIG) has replaced Goldman as its main corporate adviser. The move could be the first of many client defections to come for Goldman.

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