Critics take a back seat to satisfied shareholders at annual meeting
By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- Goldman Sachs Chairman and Chief Executive Lloyd Blankfein, whose investment bank faces federal fraud charges, received a far friendlier reception from shareholders Friday than he got from congressional lawmakers last week.
But there were some exceptions, including veteran shareholder activist Evelyn Davis, who used the company's annual shareholder meeting as a platform to pepper Blankfein on whether he intends to resign.
"This was once a great company, now it's going to pieces," Davis said before a packed annual meeting of about 300 shareholders in lower Manhattan. "The only way out is if you'd voluntarily step down."
Blankfein at first said he'd wait until after shareholders voted on the directors slate before answering Davis. But when she persisted, the chief of Goldman Sachs (GS 142.99, +0.67, +0.47%) said emphatically, "I have no intention of doing that right now."
Soon after, 95% of the company's shareholders re-elected Blankfein chairman of the board. They also re-elected all of Goldman's existing directors.
Blankfein's exchange with Davis marked a nearly three-hour meeting at a crucial time for Goldman Sachs and Wall Street as a whole, with shareholders opining about the causes of the financial crisis, the ailing health of Main Street, and the tide of mortgage foreclosures.
While the gathering didn't spawn brawls or shouting matches, it marked one of the most contentious annual meetings in the firm's 144-year history.
Opening the meeting, Blankfein attempted to defuse criticism of the bank by announcing plans to form a business standards committee to probe the firm's ethics and client relationships.
"We need a rigorous self examination," he said. He did not name the committee, or a timeline for action with the move, however.
Commanding the meeting from the rostrum, Blankfein, dressed in a blue suite, white shirt and red tie, kept his composure, smiled often, and listened.
Acknowledging the lawsuits, regulatory scrutiny and financial reform measures on Capitol Hill, Blankfein admitted the presence of a "strain on clients and a strain on us" but added that the firm's customers have been more supportive than expected.
His comment carried extra weight after reports that AIG (AIG 38.70, +1.95, +5.31%) dropped Goldman Sachs as an advisor.
Shareholder Cathy Rowan of the Maryknoll Sisters said a resolution requiring greater collateral in derivatives trading won more than 30% approval from shareholders.
Rev. Jesse Jackson stood up and said Goldman Sachs needs to increase the diversity of its board to include more women, African Americans, and representatives of the U.S. consumer. He also called on the bank to do more to help average Americans.
"The roots are dry and getting dryer," Jackson said.
Shareholder Kimi Puntillo said in an interview before the meeting that Goldman Sachs and other Wall Street banks have, "put the consumer behind the eight-ball and I'd like to see that change. The problems go beyond Goldman to the deconstruction of consumer protection."
