(Bloomberg News) Lloyd C. Blankfein, chief executive officer of Goldman Sachs Group Inc., has sought to quell shareholder concerns about its bonuses and business practices at the past two annual meetings. Today, he will try again.

As the fifth-biggest U.S. bank by assets hosts investors for the first time at its building in Jersey City, New Jersey, shareholders are still questioning Goldman Sachs's actions during the financial crisis, executive pay and business model.

"They really do have to reshape the firm and get the message out there that 'Look, here's what we're going to look like going forward,'" said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $14.8 billion, including almost 135,000 Goldman Sachs shares. "I still think we're one headline away from this stock getting clobbered."

Goldman Sachs was the most-profitable securities firm when Blankfein, 56, took the helm almost five years ago. While the company survived the financial crisis that bankrupted smaller rival Lehman Brothers Holdings Inc. and repaid U.S. rescue funds and Warren Buffett's Berkshire Hathaway Inc., its practices before the crisis have remained under scrutiny.

Goldman Sachs fell $1.11 to $150.41 yesterday on the New York Stock Exchange and has dropped 10.6 percent this year, compared with a 0.6 percent gain for the 82-member Standard & Poor's 500 Financials Index and a 6.2 percent advance for the S&P 500 Index.

$550 Million Settlement

At last year's meeting, Blankfein created a business- standards committee to study the firm's practices and recommend ways they could be improved. The committee, which issued a report in January, was formed in part as a response to an April 2010 Securities and Exchange Commission lawsuit alleging the firm misled clients about a mortgage-linked investment. Goldman Sachs paid $550 million in July to settle the suit.

The questions didn't end there. Last month the U.S. Senate's Permanent Subcommittee on Investigations issued a report on the causes of the financial crisis that accused New York-based Goldman Sachs of misleading clients in its sales of mortgage securities, a charge the firm denies. The report was referred to the Justice Department and the SEC, which have said they are looking into it.

"There are still lingering problems" for Goldman Sachs, said Benjamin B. Wallace, an analyst at Westborough, Massachusetts-based Grimes & Co., which manages about $1 billion and doesn't own Goldman Sachs stock. "If the Senate and the SEC and the Department of Justice would stop investigating them they could probably put it behind them."

'Sins of the Past'

The business-standards committee was a good idea for public relations and a useful guide for future conduct, "but the problem is that does not absolve you from the sins of the past," said Huntington's Sorrentino.

"I would not at this moment say that any financial services firm, especially Goldman, who was preeminent during that whole time, is out of the woods on this," he said. "At this juncture, given the magnitude of what happened, I don't know what the time window is."

At the meeting two years ago, as public outrage over Wall Street bonuses swelled following the government bailouts of financial institutions, Blankfein read shareholders a description of Goldman Sachs's compensation principles. The principles included an emphasis on tying pay to long-term firm performance and avoiding multiyear guarantees.

Cash Bonuses

Blankfein, who's also Goldman Sachs's chairman, and top deputies including Gary D. Cohn, president and chief operating officer, and David A. Viniar, chief financial officer, received no bonuses for 2008 and no cash bonuses for 2009. Earlier this year, Goldman Sachs disclosed that it was increasing salaries for Blankfein and his deputies and paid Blankfein $19 million for 2010, including a $5.4 million cash bonus.

Institutional Shareholder Services Inc. recommended that stockholders cast a non-binding vote against the awards for Goldman Sachs's executive officers. The ISS report cites a "pay-for-performance disconnect" after Goldman Sachs's executives' compensation increased even as profits fell last year.

Glass Lewis & Co., another proxy advisory service, expressed concern about Goldman Sachs's "opaque program" for determining compensation, even though it recommended that shareholders vote in favor of the awards.

Social Responsibility

Christian Brothers Investment Services Inc., which manages $4 billion and owns about 68,000 Goldman Sachs shares, is voting against the pay awards this year, said Julie Tanner, the firm's assistant director of social responsibility.

"I don't think that the pay level is justified," Tanner said in an interview. "There's a level beyond which pay is not appropriate and needs to be reined in, and I think this company is one of those examples."

For investors like Sorrentino, a bigger concern is how the company plans to drive revenue and profit growth going forward. Although the firm rebounded from the crisis to achieve record profit in 2009, earnings sagged last year and in the first quarter of 2011.

Goldman Sachs's return on equity, a measure of how well the firm reinvests shareholder capital, dropped to 11.5 percent in 2010 from 32.7 percent three years earlier. While it still beats competitors including Morgan Stanley, whose 2010 return on equity from continuing operations was 8.5 percent, investors question whether the firm can achieve its former profitability.

"There is a more competitive framework out there and they do have to scrape for business," Sorrentino said. "In the regulatory environment we find ourselves in, where does Goldman sit in all this? How should we set our expectations for success going forward?"

Two More Years

Blankfein's future at the firm continues to be subject to speculation. Earlier this week, the New York Post, citing people it didn't identify, reported that Blankfein is likely to stay for at least two more years. The company has said he has no plans to leave.

"Probably starting about now is when he could safely leave and say he got Goldman through everything," said Grimes & Co.'s Wallace. "But maybe with all the PR stuff, you want to stay on because one thing you want to do when you turn it over to new leadership is have a clean slate."