Goldman Sachs bigshot Jon Winkelried is so out of here. The same day that Barack Obama signed into law a stimulus package that included severe restrictions on executive pay, Winkelried resigned as President and Co-Chief Operating officer of Goldman Sachs, CNBC reports.
Don’t rush to the conclusion that it’s all about pay caps however. Winkelried, who is a spritely 49, may say he is “retiring” but his position has long been controversial at Goldman. His elevation to co-presidency is seen by many as a power move by the investment banking division to maintain a modicum of control over the firm after Hank Paulson, an investment banker, left and was succeeded by Lloyd Blankfein, who had come up through the J. Aron trading division.
Winkelried used to run the investment banking division, and was made co-president after Paulson left to run the Treasury Department. Paulson, even after he was nominated, reportedly put pressure on Blankfein to split the presidency–essentially, the number 2 spot at Goldman–into two. Gary Cohn, a longtime friend of Blankfien and a fellow product of the trading division, had been a favourite for the number 2 spot. Winkelreid’s elevation diminished his role. (Also, note that Winkelried is bald—like Paulson, Blankfein and Cohn—which seems to be some kind of prerequisite for rising to the top of Goldman.)
Winkelried collected $53.4 million in cash and stock compensation in 2006. In 2007 he took down $67.5 million in cash and stock. Last year, his compensation was greatly reduced as Goldman’s top executives agreed to forego bonuses.
Until the announcement this afternoon, it was widely assumed that Winkelried might be in line to run the firm after Blankfien. Now it looks like Cohn is a shoe-in for the position.
So is this some kind of coup for the traders? We’re keeping our ears to the ground for the gossip. (Email [email protected] if you have an opinion). The more innocent explanation may just be that the financial upside for Winkelried is gone for the foreseeable future. Or, maybe, he just wants to spend more time with his family.