June 19 (Bloomberg) -- Goldman Sachs Group Inc. named Gary Cohn and Jon Winkelried as co-presidents, promoting two lieutenants of new Chief Executive Officer Lloyd Blankfein who helped make the firm the most profitable on Wall Street.

Cohn, 45, is a former commodities trader who spent the past three years overseeing equities. Winkelried, 46, is an investment banker who ran fixed-income trading for five years. Goldman also appointed investment-banking co-head John S. Weinberg, 48, whose father and grandfather led the firm for more than 50 years, as a vice chairman. The board of the New York-based firm approved the promotions in Beijing yesterday, spokesman Lucas van Praag said.

Blankfein, who spent most of his 24-year career at the world's biggest securities firm by market value in fixed-income and commodities sales and trading, tapped executives experienced in equities and investment banking at a time when declining stock prices and rising interest rates threaten profit growth. The choices may limit concern that Goldman is neglecting investment banking, which provided 15 percent of last year's revenue, in favor of trading, responsible for more than half the total.

``You want the people throughout the firm to think that the areas they're in are well represented at the top,'' said Henry Higdon, who runs an executive-search firm in New York that serves financial clients including Goldman. ``Parts of the business that might not be attracting the most profits today could become the most valuable tomorrow.''

Blankfein, president and chief operating officer since 2003, was named chairman and CEO on June 2. He succeeds Henry Paulson, 60, who was nominated May 30 as U.S. Treasury Secretary.

Revolving Door

Today, Robert Zoellick resigned as deputy U.S. secretary of state to join Goldman, continuing the tradition of a revolving door between the firm's senior ranks and government.

Under Paulson, himself an investment banker, trading surged, accounting for 63 percent of the firm's record $20.4 billion revenue in the first half of fiscal 2006. That compares with 43 percent in 1999, the year of Goldman's initial public offering. At the time, investment banking accounted for a third of the firm's revenue, twice as much as it does now.

The firm posted $2.31 billion in fiscal second-quarter net income, capping the most profitable six months for any firm in the history of the securities industry

Goldman, with a staff of 22,425 people, outstrips its closest rivals with annual earnings of $251 million per 1,000 employees, according to data compiled by Bloomberg. That compares with $92.8 million at Morgan Stanley, which employs 53,200, and $93.7 million at Merrill Lynch & Co., with a payroll of 54,600.

`Tougher Markets'

The promotions of Cohn and Winkelried put ``a bigger emphasis on generating revenue from utilizing the bank's own capital,'' said Jason Kennedy, managing director at recruitment firm Kennedy Associates in London. ``As the markets are becoming tougher and more volatile, clients are being more reluctant and are sitting on the fence in terms of buying and selling.''

Executives at Goldman, Lehman Brothers Holdings Inc. and Bear Stearns Cos. said last week that market declines may hurt trading and weaken CEO confidence, causing a slowdown in takeovers and securities offerings.

The MSCI World index, which measures the share performance of 1,926 global companies, has fallen 7.3 percent since April 30. Commodity prices, as measured by the Reuters/Jefferies CRB index, covering energy, metals and agricultural products, have fallen 7.2 percent from May 11 records.

Goldman shares have declined almost 15 percent since reaching a record $168.55 on April 20. They rose 55 cents to $144.55 in 10:13 a.m. composite trading on the New York Stock Exchange.

Commodities Trader

Cohn has worked in trading since joining Goldman's J. Aron & Co. commodities unit in 1990. Winkelried, who became co-head of investment banking last year with Weinberg and Scott Kapnick, ran fixed-income for two years with Blankfein and for a year with Cohn.

Winkelried started at Goldman in 1982 as an investment banker, became a partner in 1990 was promoted to run leveraged finance in 1995. In 2000, Winkelried, then head of fixed income, currency and commodities in Europe, was named co-head of the division worldwide with Blankfein.

Cohn and Winkelried also were appointed co-COOs today. Together with Weinberg, they'll join Goldman's executive office.

``It puts at least two people in the running to succeed Blankfein, and that's an advantage because the board can look at two people and how they're doing,'' said Higdon, managing partner at Higdon Partners LLC. ``These firms are so complex that they shouldn't be run by one person.''

Asia, Europe Bypassed

The board picked U.S.-based Cohn and Winkelried over colleagues in Europe and Asia such as Thomas Montag, J. Michael Evans and Michael Sherwood. Cohn and Winkelried will assume their new roles full-time and join Goldman's board as directors. Paulson took part in yesterday's meeting to discuss the promotions by conference call from New York, van Praag said.

Weinberg, who'll remain a co-head of investment banking, is the son of John L. Weinberg, 81, who led Goldman in the 1970s and 80s with John Whitehead, 84. His grandfather, Sidney Weinberg, was chairman from 1930 to 1969.

The appointments of Weinberg, Cohn and Winkelried continue a tradition of power sharing by bankers and traders at Goldman. Mergers banker Stephen Friedman, 68, and equity trader Robert Rubin, 67, split the top role from 1990 until 1993.

Other contenders for president included Evans, 48, chairman of the firm's Asian operations; Montag, 49, co-president of Goldman Sachs Japan Ltd.; Chief Financial Officer David Viniar, 50; and Sherwood, 40, co-CEO of the firm's European unit.

`Client Guy'

A Cleveland native, Cohn graduated with an undergraduate degree in finance from American University's Kogod School of Business in Washington in 1982. He worked as a silver trader in New York before joining Goldman in commodities, like Blankfein.

Cohn's association with Blankfein extends outside the office, according to Ned Sadaka, a hedge fund manager who has vacationed with them in Cabo San Lucas, a Mexican resort on the Baja peninsula. Sadaka, who runs Para Advisors Inc. in New York, describes Cohn as ``a great client guy even though he comes from a trading background.''

Cohn was promoted to partner in 1994, while running Goldman's metals business from London, and named chief operating officer of fixed income, currency and commodities, or FICC, in March 2002. Last year, he became one of four co-heads of FICC and equities, along with Evans in Hong Kong, Montag in Tokyo, and Sherwood in London.

Childhood Battle

In a September 2004 article published in Fortune magazine, Cohn was quoted as saying that his childhood battle with dyslexia gave him a will to succeed.

``Years of being told you were going to fail makes you say `I'll show you,''' Cohn said, according to the article.

Winkelried, a native of Millburn, New Jersey, has been on the management committee since 1999. He joined Goldman in 1982, the same year as Blankfein, after getting his MBA from the University of Chicago's business school.

In his first year of college, Winkelried got a ``C'' in an introductory physics class, a setback that changed his approach to studying, he said in a profile on the University of Chicago's Web site. He brought his books to the library and pledged not to leave until he caught up on his coursework. ``That day changed my entire life,'' he said.

Weinberg received a bachelor's degree from Princeton University in 1979 and a master's from Harvard Business School in 1983. He joined Goldman in corporate finance in 1983. Weinberg became a partner in 1992 and a managing director in 1996. He joined the management committee in 2002.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net; Adrian Cox in London at acox2@bloomberg.net.

Last Updated: June 19, 2006 10:32 EDT