In 2006, Jon Winkelried, a Blankfein lieutenant who was then Goldman’s co-president, stunned some bankers by suggesting that the bank make more money from its powerful corporate customers. One goal was to have Goldman wear several hats in deals, for example, by advising on a merger, financing it and investing in the transaction.
Mr. Winkelried and executives under Mr. Blankfein changed the way investment bankers were measured. Goldman instituted banker “profiles,” a sort of daily profit and loss statement, to see how much business its employees and clients were doing. While such assessments have long been common elsewhere on Wall Street, Goldman disdained them until Mr. Blankfein became chairman and chief executive.
Mr. Winkelried, who has since left Goldman, declined to comment for this article.
The shift had two effects, Goldman bankers said: It focused employees on the customers who might generate the most money for Goldman, and it prompted bankers to fight more aggressively for credit for their deals.
“It was more efficient,” one former partner said. “But it changed the way we ran the business.”
Mr. van Praag, the Goldman spokesman, said that banker scorecards were traditionally used only for so-called relationship bankers, who cultivate customers over time. But starting in 2001, investment bankers became responsible for a wider array of products — debt, complicated securitized products, and other types of financing — and the new system kept a tally on all their activities, not just advisory work with clients.
The profiles update automatically with revenue tallies. Bankers may review them at any time.
Former partners said that while Goldman had always sought to maximize profits, the bank used to take a longer-term view. For instance, if a corporation that Goldman was advising decided against a merger, the bank would not necessarily drop the customer, figuring that it might reap profits from a deal in the future.
“You probably had a little more tolerance for longer-term perspective,” one former partner said.
Given Goldman’s plans to pay out billions of dollars in bonuses this year, many outsiders might think the bank pays little attention to its public image. In fact, current and former executives say, Goldman is acutely aware of its diminished public standing.
But even people close to Goldman acknowledge that as long as the bank is making a lot of money, public opinion does not matter all that much.
“Their reputation has suffered,” Mr. Levitt said. “So has every other financial institution. And I’d rather suffer the way Goldman suffers.”
Still, Goldman’s tarnished reputation has become a hot topic inside the bank. A few months ago, at a meeting of Goldman’s in-house leadership program, known as the Pine Street Group, the bank’s image came up. The group of 30-odd people wrestled with questions like how to talk to family members about Goldman and its role in the financial world.
Another question that came up was what to do if someone at a cocktail party started criticizing Goldman. Mr. van Praag, who ran the meeting, suggested that the executives should explain how Goldman made its money. But another Goldman executive offered a different answer: change the subject.