24/7 Wall St. has evaluated over 200 CEOs in order to select it CEO of the Year. Six finalists were chosen from the list. The measurements were based on company stock performance for the last two years, innovation, financial results, and the quality of the competition that each company faces in its markets. We also took into consideration whether the corporation was operating in an industry with special challenges.
Blankfein has only been the head of Goldman Sachs (GS) since June 2006, but it would be hard to find a more difficult time in which to lead a major financial institution. The mortgage crisis and near-collapse of private equity have done significant and, perhaps, permanent damage to some of the world’s largest investment and money center banks.
Since the beginning of the year, shares in Goldman are only up 10%. But, Wall St. has to look at that performance relative to the competition. Shares in Morgan Stanley (MS) are down over 35% during that period. Merill Lynch (MER) is off about the same amount and Citigroup (C) is down nearly 40%. Overseas, shares of Credit Suisse (CS) are off 12% and UBS (UBS) is down 16% so far this year.
Goldman was smart enough to keep its business risks spread geographically and across business lines and its bets on the mortgage markets have been modest. Goldman did have problems in its huge Global Alpha fund, but the company has been adroit at trading and proprietary investing. It has also kept its position as one of the world’s leading debt and equity underwriters and M&A advisers.
In a very bad year, Goldman was the only firm in its industry that did relatively well.
Douglas A. McIntyre is the former editor-in-chief of Financial World Magazine which began the CEO of the Year Award in 1981. He was also president of Switchboard.
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