(Bloomberg) -- Goldman Sachs Group Inc. lost its two most-experienced trading leaders as the bank’s senior ranks feel the ripple effects of an expected succession at the top.
Pablo Salame and Isabelle Ealet, two of the three co-heads of the securities division, will leave the bank next month. The changes leave Ashok Varadhan to run the trading division, according to an internal memo Monday from Chief Executive Officer Lloyd Blankfein.
Goldman Sachs set the stage for its next era in March by naming David Solomon as sole president under Blankfein, picking him over Harvey Schwartz as heir apparent for the top job. That’s likely to lead to more shakeups as longtime Blankfein lieutenants or Schwartz allies move on. Solomon asked both executives to stay with the firm, but the two independently decided to leave, a person familiar with the matter said.
Salame, a 52-year-old Ecuador native and tennis enthusiast, has led the trading business since 2008 and was named a vice chairman in 2016. Blankfein was among the executives who poached him from Citigroup Inc. as an emerging markets trader in 1996, and he ran the trading unit with Schwartz for five years. He was seen as an executive who could have taken on a co-president role once Solomon took the CEO role to give the trading division a senior voice, the person said.
Ealet, a 55-year-old French citizen who’s an adviser to the nation’s embassy in the U.K., joined Goldman Sachs in 1991 and rose up through the commodities business that had also produced Blankfein and Schwartz. Based in London, she took on the co-head role in 2012 after leading the commodities unit, which produced more than $3 billion of revenue annually before the financial crisis.
Goldman Sachs’s trading leadership has been under pressure as the fixed-income business posted its lowest revenue in Blankfein’s tenure in 2017, driven by the worst commodities performance in the firm’s almost 20 years as a public company. Blankfein said in January that the bank had “the right people running the business.” Goldman Sachs showed signs of a rebound in the first quarter of this year, as overall trading revenue jumped 31 percent, the most among the biggest U.S. banks.
Goldman won’t immediately replace Salame and Ealet, the person said. Varadhan, 45, was the newest member of the troika, taking on his role in 2014.
He’ll be backed by an executive group that includes Michael Daffey and Paul Russo, the co-chief operating officers of the equities-trading business, and Jim Esposito and Justin Gmelich, the co-COOs of the fixed-income, currencies and commodities unit. Julian Salisbury will continue to lead the bank’s special-situations group.
Salame and Ealet will become senior directors after they leave, according to the memo. Senior directors advise the firm on matters related to their areas of expertise and aren’t employees.
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