Friedman Steps Down as Goldman, Sachs Chairman

The chairman of Goldman, Sachs & Co. said Tuesday he is resigning to make room for a younger management team at the nation’s biggest privately held investment bank.

The resignation of Stephen Friedman, 56, comes as Goldman is struggling against sharply lower earnings. While the privately held partnership is not required to publicly report results, Friedman described 1994 as “a frustrating year” in a comment on profits that was rare for a Goldman executive.

Friedman will be replaced by Jon Corzine, 47, co-head of Goldman’s fixed-income division, at the end of November. In addition, Henry Paulson, 48, co-head of the firm’s investment banking unit, will become vice chairman and chief operating officer.

“While almost all of our businesses have done well this year, the firm’s profits have been disappointing, particularly as a result of trading results in some of the businesses which performed extraordinarily well in the last few years,” Friedman said in a resignation letter Tuesday to the firm’s 9,000 worldwide employees. He has been chairman since 1990.

Like those of Wall Street rivals, Goldman’s trading profits were wounded by the tumble in bonds and stocks that started early this year. Last year Goldman earned $2.3 billion, up 75% from 1992, making it the most profitable firm on Wall Street.

Monsanto Co. Chairman and Chief Executive Richard Mahoney will retire in March after 12 years as chief executive that saw the company shift to making more consumer goods and reducing its emphasis on low-margin bulk chemicals.

The 60-year-old Mahoney helped groom his successor, Monsanto President and Chief Operating Officer Robert Shapiro, to lead the maker of Roundup herbicide and NutraSweet after his retirement, the company said.

“I think all of Wall Street likes Mr. Shapiro,” said Harvey Stober, Dean Witter Reynolds analyst. “We think he has a shorter fuse, perhaps, in terms of his ability to tolerate things that he doesn’t see as right.”

Shapiro, 56, is expected to be more aggressive in restructuring assets and “carrying out change” at Monsanto, Stober said.