SEC: Goldman Cannot Ignore Proposal to Split Chairman, CEO Roles

Lloyd Blankfein, CEO of Goldman Sachs.
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Lloyd Blankfein, CEO of Goldman Sachs.

Goldman Sachs Group lost its battle to ignore an investor proposal to strip Chief Executive Lloyd Blankfein of his chairman role, according to correspondence posted on the U.S. Securities and Exchange Commission's website on Friday.

SEC staff sent a letter to Goldman internal counsel Beverly O'Toole this week, saying the agency is "unable to concur" with Goldman's view that the shareholder proposal does not warrant a vote.

CTW Investment Group, which owns 25 Goldman shares, sent the proposal to the bank late last year for inclusion in its proxy statement. The investor argued that the chairman's role should be filled by an outsider who has never held an executive role at the company, "to promote the robust oversight and accountability of management."

CTW is a coalition of unions that has become more active in proxy battles in recent years.

Goldman responded by sending a letter to the SEC in January, requesting permission to omit the proposal from its proxy statement because the bank said it was "inherently vague and indefinite."

The SEC's decision this week denied Goldman's request.