What Happened to Goldman Sachs

Chapter 8

Nagging Questions: Leadership, Crisis, and Clients

THE MERE FACT THAT GOLDMAN SURVIVED AS AN INDEPENDENT company in 2008 during the financial crisis when many of its peers did not can be considered a success, at least in a relative sense, but it is a precarious one at best. Goldman wrote in its proxy statement, “In 2008, we outperformed our core competitors due, in part, to the outstanding performance of our Named Executive Officers (NEOs).”¹ Goldman had a return on equity of 4.9 percent versus −5.0 percent for its peers in 2008, and 22.5 percent versus −1.8 percent, in 2009.

Whether Goldman would have survived without government intervention is debatable.² In fact, in the days immediately following the collapse of Lehman, it became ...