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Blankfein out as Goldman Sachs CEO by summer?

February 17, 2012: 4:17 PM ET

Exclusive: Goldman Sachs prepares for life after Lloyd Blankfein, and Gary Cohn is the leading candidate to succeed him as CEO.


Gary Cohn, right, is next in line to replace Lloyd Blankfein, left

FORTUNE -- Lloyd Blankfein may step down as chief executive of Goldman Sachs as early as this summer; and president and chief operating officer Gary Cohn is the lead candidate to replace him, according to a Goldman executive and a source close to the firm.

A Goldman spokesman declined to comment.

To be sure, anything can happen over the course of the next few months and the departure of Blankfein, 57, is not certain. It is still up in the air whether Blankfein wants to step down. It would also not be unheard of for Blankfein to share the role of CEO, as so many others at Goldman have in the past. Former co-heads include John Weinberg and John Whitehead; Robert Rubin and Stephen Friedman; and Jon Corzine and Henry Paulson.

But corporate governance experts have emphasized that leadership changes at the nation's largest financial institutions go a long way toward helping those firms move past the troubles - particularly the reputational damages – wrought by the financial crisis. The feisty Blankfein, the son of a postal worker who grew up in Brooklyn, is one of the only big bank CEOs to have kept his job after the financial crisis. The other is Jamie Dimon, CEO of JPMorgan Chase (JPM).

Goldman's A-list of leaders

It seems increasingly certain that Gary Cohn would replace Blankfein. Cohn rose through the ranks at the firm as a trader, along with Blankfein; but over the last 17 years or so he has become a top manager. All of the firm's key business heads report to Cohn. He has also emerged as a global ambassador for the bank. Most recently Cohn hosted a dinner at this year's World Economic Forum in Davos, which was attended by corporate leaders and politicians.

Cohn, 51, is currently the board's top choice, according to sources, despite speculation last summer that Cohn would be passed over due to a sometimes testy demeanor and his close ties with Blankfein. These sources add that J. Michael Evans, the global head of growth markets, tried to position himself to succeed Blankfein. Evans, who pushed for Goldman (GS) to become less dependent on trading revenue and to focus on investment banking, has not won the support of the board. He is currently overseeing implementation of changes created by the firm's business standards committee; but sources say that his position at the firm would be very precarious if Cohn were to become CEO.

As for who would replace Cohn, there is speculation that David Solomon, co-head of the investment bank, and Harvey Schwartz, co-head of the securities division, are being groomed for bigger positions at the firm, possibly including the role of chief operating officer.

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Katie Benner
Katie Benner
Writer, Fortune

Katie Benner joined Fortune in October 2006. As a writer for the magazine and the website, she focuses on Wall Street and the economy. Prior to joining Fortune, Benner worked at TheStreet.com, CNNMoney, and as a freelancer in Beijing for China International Business, the South China Morning Post, and as a columnist for Beijing Review. She has a B.A. in English from Bowdoin College.

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