This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 21, 2017).
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Goldman Sachs Group Inc. became a public company 18 years ago. It is starting to look more like one.
Goldman's 450 or so partners own just 4.8% of the firm today, according to a securities filing late Wednesday. That is the lowest level since its initial public offering and slips under a 5% regulatory threshold that for years has mandated public disclosures that opened a window into the sway held by this elite inner circle.
Going forward, Goldman won't have to disclose its partners' stakes, or their buying and selling of the bank's shares, unless the group's collective stake jumps back over 5%.
That would shield from public view when partners unload their shares en masse, which happened last winter as Goldman stock touched new highs.
The filings are the last outward vestige of the old private partnership that once ruled Goldman. The document itself is defiantly old-school, using a stripped-down format abandoned by most companies for Securities and Exchange Commission submissions.
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The private-partnership era, which stretched from Goldman's 1869 founding to its 1999 IPO, once meant that access to its upper echelons meant tying one's personal fortunes to the firm's capital.
Still, the ritual of selecting partners every two years has remained a vital part of the firm's identity, a way to reward and motivate its most promising employees and help guard the firm's culture as Wall Street changes around it.
Partner slots carry minimum salaries of about $1 million and bonuses that can be multiples of that. Partners also get access to invest in firm deals and other perks.
Goldman's IPO made its partners much more wealthy. But it also set in motion a slow-motion transformation of the firm. With more than 95% of its shares held by outside investors, Goldman is now, more than ever, a public company.
That lesson was hammered home this week, when Goldman faced tough questions from analysts about whether it has moved quickly enough to address weakness in its core trading business. The firm posted steep declines in fixed-income trading that sparked a 2.6% drop in shares.
Analysts are also pressuring Goldman on its signature secrecy, a privilege afforded to private partnerships but not public companies.
On its earnings conference call Tuesday, one analyst questioned why Goldman doesn't, as peers do, tell investors what they can expect in dividends and share repurchases.
"Analysts and investors are grown up enough" to understand that forecasts might change, the analyst, Autonomous Research's Guy Moszkowski, told Goldman Chief Financial Officer Martin Chavez. "I just don't think you're doing yourselves any favors by not telling us."
Write to Liz Hoffman at firstname.lastname@example.org
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July 21, 2017 02:47 ET (06:47 GMT)