Lloyd Blankfein: Wall Street’s living legend

Lloyd Blankfein has rightfully earned a star on the Wall Street walk of fame. At 61, this Jewish New Yorker, who was born in the neighborhood of the Bronx, has made history as the head of Goldman Sachs, one of the largest investment banks in the world and has become one of the five most powerful men in the business world, according to Fortune magazine.

The son of a postal service worker in Manhattan, he went through primary and secondary education in public schools in New York and completed his college education at Harvard. He worked as a lawyer for the law firm Donovan, Leisure, Newton & Irvine before joining the division of commodities at Goldman Sachs, J. Aron, as a seller of gold bullion and currencies, in 1981, after the bank itself refused offer him a job.

His career has been linked to the bank where he gained confidence and responsibilities, first at J. Aron, and from 1998 at Goldman Sachs, to take over the group as CEO on May 31, 2006, after Henry Paulson left office to become Secretary of the Treasury of the United States.

Since then, his popularity has only grown, although he has already been confronted by his greatest professional challenge, which he overcame with a great level of success. Not only did he manage to keep Goldman Sachs safe from a subprime earthquake, but he also managed to close 2007, a year to forget for investment banking in general, with record results, thanks precisely to his bets on the mortgage crisis at the time.

Blankfein became the sole survivor of the apocalypse caused by the subprime pandemic, which ultimately resulted in huge losses in Citigroup, Merrill Lynch or UBS, to name just a few, as well as the dismissal of their top executives.

Presenter_Lloyd Blankfein_patrick dwyer_american financial titan
Image courtesy of Fortune Live Media at Flickr.com

Zoe Cruz, the highest-ranking woman in Wall Street, who was responsible for Morgan Stanley, fell. Stan O’Neil, chief executive of Merrill Lynch and Citigroup CEO Chuck Prince were fired. Others who also fell from their pedestal: Bear Stearns’ Warren Spector, and Peter Wuffli of UBS.

Blankfein escaped from all of these dismissals with success and a few zeroes to the right of his checking account due to his expertise and proven ability to dodge when the financial turmoil is taking over. The chief executive of Goldman Sachs became the highest paid one in the Big Apple with a total reward of $54 million in 2007. Of this amount, according to data submitted to the Securities and Exchange Commission (SEC), $600,000 correspond to his salary, $27 million to a bonus and $26 million to stock options. In addition, another $384,000 were used to pay for his car and driver as well as his own personal security.

Admiration and envy

His success has turned him into an admired executive, but at the same time he has been envied, and he has even sparked fears that border on paranoia. The director of a competitor’s firm stated that he woke up every morning “with a knot” in his stomach when he realized that he had to compete against Blankfein.

The Guardian newspaper, for instance, described his salary as “excessive” at a time of clear economic weakening in which two million Americans were in danger of losing their homes to foreclosures. However, some said that without his leadership, the investment bank could have faced similar losses to those recorded by its competitors, so every dollar of his checking account would be more than justified.

In addition, gossips attributed part of his success to his acquaintances and friends within the government. Not surprisingly, some former executives of Goldman Sachs occupied positions of great political and economic influence, such as Henry Paulson, Jon Corzine, former governor of New Jersey and Robert Zoellick, former president of the World Bank, with which he could have had access to privileged information.

Blankfein has ignored these criticisms. However, he is aware that his luck can always change. He’s stated that “some things will go wrong, no matter how good you are.” He added that if you’re really bad at what you do, there is a 9% chance that you have a problem. If you’re really good, maybe you’ll have a 3%.

He is happily married to a lawyer, Laura Jacobs Blankfein -their marriage was even announced in The New York Times-, and they have three children. Blankfein enjoys his success in New York, where he owns a $26.5 million apartment in Central Park.

In 2015 he announced that he had been diagnosed with a highly curable type of cancer lymphoma. After being treated with several sessions of chemotherapy over the course of a few months -600 hours total- in New York, he said he was feeling “pretty good” in an interview with CNBC in early 2016.

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