Gary Cohn, director of the U.S. National Economic Council, arrives at the White House. Photo / Andrew Harrer
Gary Cohn, director of the U.S. National Economic Council, arrives at the White House. Photo / Andrew Harrer
Few companies have benefited more from the record-breaking surge in stock prices since the election of President Donald Trump than Wall Street giant Goldman Sachs.
The big banks' stock price is up nearly 30 per cent since early November, helping boost the closely-watched Dow Jones industrial average above 20,000 points for the first time on Wednesday.
It reported a $7 billion profit for 2016 and industry analysts widely expect the firm to see profits rise further as Trump and his appointees, including several Goldman Sachs alums, work to roll back regulations put in place to rein in Wall Street after the financial crisis.
After spending the presidential campaign as a punch line for progressive groups -- and Trump -- Goldman Sachs has found itself in a tricky position: How to take advantage of a new, less adversarial attitude towards Wall Street likely to bubble through Washington during Trump's presidency, while not becoming the focus of lingering populist anger at big banks.
"Goldman Sachs went from persona-non-grata the day of the election to back in the White House" after the election, Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, said in a research note.
Already, protesters have spent several nights sleeping outside the Goldman's headquarters in New York, waving signs using the bank's dreaded nickname "Government Sachs."
Once, the demonstrators came into the bank's lobby with a bullhorn and were thrown out. Protesters, who have also descended on Goldman offices across the country, say they will return once a week during Trump's first 100 days in office.
After accusing his competitors, Hillary Clinton and Ted Cruz, of being too close to the bank during the presidential campaign, Trump has picked several Goldman Sachs alums to key economic jobs in his administration, they say.
Among them is Steven Mnuchin, a 17-year veteran of the bank, who has been nominated to be treasury secretary ("I think of myself as a regional banker, not Goldman Sachs," Mnuchin told a Senate committee last week), and Stephen Bannon, Trump's chief strategist,who worked on mergers and acquisition deals.
Anthony Scaramucci began his career at the New York bank and has emerged as one of Trump's closest advisers.
Cohn is benefiting massively from the failure of regulators to finalise this rule and now he'll be in a position to ensure that his former Wall Street colleagues never have to face even these modest limits on their high-risk pay.
Dina Powell, who ran Goldman Sachs' philanthropic efforts, has been appointed assistant to Trump and senior counsellor for economic initiatives.
Goldman Sachs' long-time president, Gary Cohn, who developed a reputation for a no-holds-barred style during his more than 25 years at the bank, has been tapped to lead the powerful National Economic Council, making him one of Trump's top economic advisers.
Cohn is leaving the bank with more than $133 million, according to research firm Equilar. Some of that, $20 million, is his salary and bonus for 2016, Goldman Sachs said in a Securities and Exchange Commission filing Tuesday.
His package also gives Cohn access to thousands of shares of company stock and cash that he otherwise would not have been received for years. About $65 million of the exit package, according to Equilar, are cash and stock awards that are being paid out at an accelerated timetable.
It's an imprimatur on our firm that we have such good people that the administration wants to hire them.
Cohn would not have been able to sell some of that stock had regulators put in place rules called for under the 2010 financial reform package, Dodd Frank, said Sarah Anderson, global economy project director of the Institute for Policy Studies. That could have reduced his exit package by about $30 million, she said.
Regulators issued a proposed rule in 2016 aimed at curbing excessive risk on Wall Street by requiring bonus pay to be deferred over four years. But they did not finalise the regulation before the end of the Obama administration and now its future is unclear since Trump has told agencies to hold off on implementing new regulations and has also vowed to dismantle Dodd-Frank.
"Cohn is benefiting massively from the failure of regulators to finalise this rule and now he'll be in a position to ensure that his former Wall Street colleagues never have to face even these modest limits on their high-risk pay," said Anderson.
Goldman Sachs executives have bristled at the perception that they will gain an advantage from having so many alums in high-level government jobs.
"It's an imprimatur on our firm that we have such good people that the administration wants to hire them," Lloyd Blankfein, Goldman long-time chief executive, said in a recent interview with The New York Times.
"The perception that they'll go to Washington and then favour us is false. The reverse is true. They'll bend over backwards to avoid that. They're not going to serve the interests of Goldman Sachs. They have their own careers and reputations to worry about."
