Goldman Sachs Group Inc. (GS) - Get Report announced the departures of two top trading executives, extending a series of management changes at the Wall Street firm following an abysmal performance last year in the company's stock- and bond-markets division.
Pablo Salame and Isabelle Ealet, two of three co-heads of the trading division, known officially as the Securities Division, will retire in June, according to an internal Goldman Sachs memo obtained by TheStreet.
The Securities Division will now be led by Ashok Varadhan, the remaining co-head, along with the chiefs of bond-and commodities-trading, Jim Esposito and Justin Gmelich, and leaders of the stock-trading unit, Paul Russo and Michael Daffey. The final member of the Securities Division's management team is Julian Salisbury, head of special situations.
Goldman has undergone a series of management changes since the board of directors in March named David Solomon as sole chief operating officer and CEO Lloyd Blankfein's heir apparent, leading to the retirement of Harvey Schwartz, a former CFO who had been serving as Solomon's co-chief operating officer.
The firm, historically a Wall Street powerhouse, turned in a worst-in-class performance last year in the highly profitable business of trading stocks and bonds. The juggernaut fixed-income division saw revenue plunge 30%, while stock trading revenue slipped by 4.5%, allowing rivals JPMorgan Chase & Co. (JPM) - Get Report , Bank of America Corp. (BAC) - Get Report Citigroup Inc. (C) - Get Report and Morgan Stanley (MS) - Get Report to steal market share.
Salame and Ealet weren't pushed out, according to a person briefed on the matter who requested anonymity because he wasn't authorized to comment publicly. Solomon had asked them both to remain with the firm, but they decided to leave anyway, the person said.
They will remain affiliated with the firm as senior directors, Blankfein wrote in the internal memo.
Salame joined Goldman 22 years ago and had served as co-head of the emerging-markets debt group and in leadership positions in corporate-bond trading and European stocks before becoming co-head of the securities division in 2008.
He was paid $14.5 million last year in total compensation in 2017, ranking him among the firm's five highest-paid executive officers, the bank said earlier this year in a regulatory filing.
"During his tenure at Goldman Sachs, Pablo has helped lead the securities division through a difficult macro environment, a complex regulatory landscape and important strategic changes," Blankfein wrote in the memo.
Ealet has been with Goldman for 27 years, starting as a commodities trader and later overseeing all of commodities trading, according to her bio on the firm's website. She has been mulling her departure for three years but stayed to help train the next generation of commodities-trading executives, the person familiar with the matter said.
"As a division head, she put an emphasis on maintaining our ability to serve the full range of our clients' needs," Blankfein wrote, "particularly during a period of challenging operating conditions."
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