The Influentials: Wall Street
Chairman and CEO, Goldman Sachs
Wall Street’s last king. Paulson, who has presided over Wall Street’s most storied investment bank since 1998, just delivered Goldman’s most profitable—$2.6 billion—quarter on record. A list of the most influential people on Wall Street could be mostly Goldman Sachs executives, and it wouldn’t be wrong. Though much smaller than the megabanks, no institution is more scrutinized, none more illustrious, and none more dominant than Goldman. And, possibly, none more arrogant: The firm has recently been accused of courting conflict; it worked both sides of the NYSE-Archipelago deal. Paulson has refashioned Goldman into a trading-profits-mad virtual hedge fund. Credit president, COO, and heir apparent Lloyd Blankfein, a former trader whose path upward was smoothed by the departure of former crown prince John Thain. Today, traders trump i-bankers in the pecking order at Goldman, and Hank Paulson’s bet on Blankfein is a bet that the trading side can keep the money rolling in.
CEO, NYSE Group
Thain is killing the floor trader to save the exchange. Just three years after the ouster of his infamous $187 million–earning predecessor, Dick Grasso, Thain has revolutionized the Big Board by merging it with its electronic rival Archipelago Holdings. Grasso got the publicity, but it’s Thain, who came from the banking side of Goldman Sachs, who’s changed the exchange fundamentally, transforming the 214-year-old member-owned not-for-profit into a publicly listed, modernized trading powerhouse that today plays home to 2,780 stocks worth a combined $22.5 trillion. The Archipelago deal also signaled the death knell of the exchange’s storied trading floor, rendered virtually obsolete by electronic trading. By the way, Thain’s salary is $6 million.
CEO, JPMorgan Chase
The most closely watched man on Wall Street, even if he’s mostly watched for what he hasn’t yet done. After being sacked as Citigroup president by Sandy Weill in 1998, Dimon retreated to Chicago and overhauled Bank One. The prodigal son returned two years ago, when JPMorgan snapped up Bank One. Still untested as CEO (he took over from Bill Harrison in January), Dimon made his first, relatively small-time move last month, nabbing parts of Bank of New York to cement his lead in New York–area retail banking, and the purchase looks astute. The charismatic Dimon is seen as Weill’s spiritual heir, the most dynamic guy on the Street, in contrast to Weill’s actual successor at Citigroup, Chuck Prince, a lawyer and caretaker CEO put into place to solve Citi’s Spitzer problems.
CEO and president, Merrill Lynch
The turnaround artist. When O’Neal assumed the top post of the world’s largest brokerage firm in 2002, Merrill Lynch was a perennial also-ran in underwriting and M&A advisory work. O’Neal slimmed down Merrill, paring a third of the firm’s staff and shedding less-profitable businesses. Merrill’s stock doubled and profits tripled to $5 billion. As rivals John Mack of Morgan Stanley and Dick Fuld of Lehman Brothers scramble to find growth opportunities, O’Neal found his in an Upper East Side diner earlier this year. Over eggs and cereal, he unloaded Merrill’s $549 billion asset-management business to Larry Fink’s BlackRock, beating out Mack for the deal. In return, his 15,000 brokers get access to BlackRock’s $1 trillion worth of assets.
Chairman and CEO, BlackRock
The most-wanted money manager on Wall Street. Critics griped that Fink, a veteran bond trader, couldn’t sustain BlackRock’s 21.5 percent average annual profit growth based on its bond exposure. So Fink responded in February by snapping up Merrill Lynch’s investment-management business in exchange for 49.8 percent of his firm, a breathtaking deal that gives Fink’s asset-management juggernaut access to an astonishing $1 trillion portfolio second only in size to Fidelity’s. The deal also keeps BlackRock, whose shares have risen tenfold since going public in 1999, firmly in Fink’s control. Industry watchers took note of the larger picture: One of the Street’s biggest bond buyers was taking his money and running . . . to the stock market.
Founder, Icahn Partners
Wall Street’s most notorious predator still breathes fire. More than twenty years after he perfected the dark art of corporate extortion dubbed greenmail, Icahn’s presence still inspires shudders in executive suites worldwide. These days, he conducts his hostile takeovers under the spit-polished label of “shareholder activist,” aligning his $2 billion eponymous hedge fund with embittered shareholders. His modus operandi rarely varies. Either he battles management for changes aimed at prodding stagnant share prices—as in his bid to break up Time Warner—or he actually seizes a company and installs cost-cutting managers. Scores of aggressive hedge funds and private-equity managers, including Warren Lichtenstein of Steel Partners, and Pirate Capital’s Zachary George, take their cues from the Icahn preybook.
Chairman and CEO, SAC Capital
The hedge-fund heavyweight Cohen literally moves markets. He controls one of Wall Street’s most powerful trading firms, believed to account for as much as 3 percent of the NYSE’s daily volume. (That’s something like 60 million shares per day traded by SAC alone.) The phenom commands 50 percent fees; lesser managers get 20 percent. Last year, he reportedly pocketed $500 million. No wonder he has spawned countless imitators, as B-school grads shun Wall Street in favor of Greenwich, Connecticut, home to more than 100 hedge funds, including SAC. Worth an estimated $2.5 billion, Cohen has become one of the most aggressive art collectors in the world; it was a seismic event when he started buying Impressionist works again last fall after a contemporary binge.