(Bloomberg News) Michael Ovitz, the former Hollywood agent whose company was said to have created enemies "the way a hurricane produces raindrops," first met Gary Cohn over lunch at Goldman Sachs Group Inc.'s headquarters in June 2009.
The two men, one the founder of the most powerful talent agency in the entertainment business, the other president of the most profitable securities firm in Wall Street history, have been in daily e-mail contact since, Ovitz said. They talk by phone three or four times a week.
During a trip to the Caribbean in December, Ovitz, now an investor, visited Cohn on the Turks and Caicos Islands. Cohn, 50, a silver trader who worked his way up to the No. 2 position at Goldman Sachs, "was always on the phone, off in a corner," Ovitz said. Cohn later told the former chairman of Creative Artists Agency Inc. he had been working on the deal to sell $1.5 billion of shares in Facebook Inc.
Ovitz, who received a severance package estimated at $140 million when he was fired in 1996 after 15 months as president of Walt Disney Co., said he's impressed with Cohn. Any Goldman Sachs director who doesn't want him to succeed Lloyd Blankfein as chief executive officer should have his "head examined," Ovitz said. "He's a trader. He has that whole feel in his body and brain and fingertips."
Blankfein, 56, who marked his fifth anniversary as head of the New York-based bank on June 28, said he doesn't have plans to step down. The firm's shares have fallen 19 percent this year and 8 percent since he became CEO.
Subprime Securities
Goldman Sachs hasn't been able to shake its reputation as the bad guy of Wall Street.
The firm paid $550 million to settle a case brought by the U.S. Securities and Exchange Commission last year accusing it of fraudulently marketing securities linked to subprime mortgages, without admitting to or denying the allegations. U.S. Senator Carl Levin, a Michigan Democrat who heads the Senate Permanent Subcommittee on Investigations, accused the firm of misleading clients and Congress, and the bank has been subpoenaed by the Manhattan District Attorney's office.
In a May 4 note to investors, William Tanona, a UBS AG analyst who worked at Goldman Sachs, said "near-term" management changes were likely.
'Culture of Commerciality'
As president, chief operating officer and the only company executive besides Blankfein on Goldman Sachs's board, Cohn should be the obvious candidate to succeed him. He isn't, say a dozen current and former colleagues who asked not to be identified because they weren't authorized to speak about succession plans or didn't want to jeopardize their relationships with the firm.