By Lauren Tara LaCapra
Tue Sep 18, 2012 6:16pm EDT
Goldman Sachs Group Inc’s (GS.N) longtime chief financial officer, David Viniar, will retire at the end of January and be replaced by Harvey Schwartz, the global co-head of securities, the investment bank said on Tuesday.
Schwartz, 48, joined Goldman in 1997 from Citibank. He is among a small group of executives who are considered candidates for the chief executive position when CEO Lloyd Blankfein eventually steps down.
Before taking on his current job, Schwartz worked in various roles selling products and services to clients. He was global head of sales in the securities division and co-head of the financing group in the Americas, which helps companies find ways to fund their operations.
In a statement, Blankfein cited Schwartz’s “deep experience in credit, liquidity, market and operational risk.”
Viniar, 57, has been with Goldman for 32 years and is the longest-serving CFO on Wall Street, having entered his current position in 2000. Viewed on Wall Street as a strong risk manager, he was instrumental in helping Goldman manage through volatile markets during and after the financial crisis that was touched off in 2007.
Viniar will join Goldman’s board of directors as a non-independent director. The bank said it also expects to name independent directors to its board soon.
“This change is part of the natural evolution,” Viniar said in a conference call with stock analysts after the announcement. “It was time for me to contribute to the firm in other ways, and give others the opportunity to lead.”
Schwartz will also assume Viniar’s responsibilities for overseeing operations and technology, and he will be co-head of the firm-wide risk committee, the company said.
In 2002, Schwartz was named partner at Goldman.
Schwartz told analysts he does not expect to make big changes in the way he does the job. “Clearly, David set the standard for CFOs, and I’m fully committed to doing my best to live up to it,” he said.
Viniar is the only CFO that Goldman has had since becoming a publicly held company in 1999.
Viniar said liquidity, or ready access to cash that might be needed suddenly, remains the bank’s biggest risk-management concern as he prepares to transfer his responsibilities to another executive.
“Anytime you ask me about the biggest risk the firm faces, you’re always going to hear me give the same answer, which is: liquidity, liquidity, liquidity,” Viniar said.
Viniar is known for having been virtually unflappable in the depths of the financial crisis and in the face of harsh criticism and government investigations that followed. He defended the company’s actions even as it settled civil fraud charges brought by the U.S. Securities and Exchange Commission.
At a hearing Congressional hearing in 2010, Viniar was asked about an email describing in a vulgar way a trade Goldman structured for clients. He did not show regret about the substance of the message, but instead responded, “I think it is very unfortunate to have that on email.”
Goldman currently has 10 directors. Two of them, Blankfein and President Gary Cohn, are also executives, and one of them, Stephen Friedman, previously served as a senior partner and chairman of the management committee when Goldman was still a private partnership.
The officials did not discuss upcoming financial results, which are due to be reported on October 16.
Goldman’s stock has climbed 32.6 percent this year. The stock closed at $119.88, down 2 cents, on Tuesday on the New York Stock Exchange.
(Reporting by Lauren Tara LaCapra and David Henry in New York. Editing by Gary Hill and Tim Dobbyn)