Wall Street’s favorite parlor game — Goldman Sachs kremlinology — got new life this week when an executive high up in the line of succession abruptly quit.
The buzz around the departure of Jim Esposito, who had run Goldman’s core Wall Street businesses of trading and dealmaking, is building just as the firm’s 400-odd partners head next week to Miami for their biannual retreat.
Esposito’s departure suggests a messier road ahead at Goldman’s headquarters at 200 West Street. It clears one thing up: CEO David Solomon isn’t going anywhere soon. But it exposes a curiously weak bench at a place that’s seen as a magnet for talented and ambitious people.
Esposito was a latecomer to the succession stakes — in 2018, he was sharing the title of chief operating officer of a trading-floor subdivision — and he never quite had the gravitas of a central-casting CEO. But he made himself a contender through shrewd internal politicking and good execution. Corporate unrest favors underdogs, and he rose quickly by putting a steady hand on Goldman’s mainstay businesses. (He convinced Solomon to merge them, a move that’s worked out pretty well and conveniently expanded his remit.)
During his tenure, Goldman’s traders took the equities crown back from Morgan Stanley and led Wall Street in newer fixed-income products like portfolio trading and private-fund loans. His parting words suggest the decision to leave was his, and I’m told this is the rare corporate departure that looks like what it is: A CEO-in-waiting-in-waiting who got tired of waiting.
Solomon survived a trying year, when restive partners and sniping alumni threatened his hold over the firm. But the noise was always louder outside 200 West than inside it, and quieter still in the boardroom. Solomon is sounding lately like a CEO firmly in control of the firm and his job, with a few years’ worth of plans.
The job will be Goldman President John Waldron’s if he stays long enough. But the depth chart falls off quickly. Marc Nachmann is a screw-tightening inside man. Ashok Varadhan is a floor trader at heart. Dan Dees, a well-liked banker, has spent his career in satellite offices. It will take time to replenish the ranks.