(Bloomberg) - One of Goldman Sachs Group Inc.’s highest-paid executives in recent years is stepping down.
Ed Emerson, who leads the commodities-trading business, will stay on as an adviser to help with the transition, according to people with knowledge of the matter. He oversaw the resurgence of the unit — long seen as a crown jewel of the trading operation — after a lean stretch clouded its future.
Emerson, 47, earned roughly $100 million over the previous three years, people familiar with the matter said. That compares with $77.5 million awarded to Chief Executive Officer David Solomon during the same span.
Within the bank, Emerson is also known as a vocal critic of Solomon’s leadership, taking issue with strategy missteps that led to billions in losses. In a recent meeting, the markets veteran told colleagues he plans to remain involved and that he’s still close with Goldman President John Waldron and trading boss Ashok Varadhan, one of the people said.
A Goldman representative and Emerson didn’t comment. The bank tapped two of his deputies, Qin Xiao and Nitin Jindal, as the new co-heads of the business, one person said.
Emerson’s standing as a top earner follows the revival arc of the business he led, which likely placed him among the highest-paid executives in US banking. The commodities unit at New York-based Goldman has played a prominent role on Wall Street since the early 1980s, when the firm acquired J. Aron & Co.
The unit has long been known for minting executives who would eventually run trading, investment management, human resources and even the whole company — with Lloyd Blankfein and Gary Cohn rising to become CEO and president, respectively.
That stature was threatened with the slowdown in the business, culminating with a disastrous 2017, when revenue from the commodities business all but vanished. That set off a furious internal debate, including whether to jettison the unit or starve it of capital that would have left it hobbled.
Wild Ride
Solomon, 61, showed a willingness to support the business, after a firmwide review that followed his ascent to CEO in 2018. The Covid-19 pandemic triggered a wild ride for commodities, and ensuing geopolitical conflicts perpetuated that volatility. That proved to be a boon for bank trading desks.
Wall Street’s most famous commodities analyst at the time, Goldman’s Jeff Currie, even called for a new supercycle for commodities that could last a decade, even before the onset of the pandemic.
Revenue from the desk soared past $3 billion last year, rivaling what the business generated in its prime, going back 15 years. It also dwarfed windfalls closer to $2 billion in 2020 and 2021. It has fallen off that pace this year, people with knowledge of the matter have said.
Emerson, a Briton born in Argentina, joined Goldman Sachs in 1999 and has steadily climbed the ranks. He started out specializing in oil trading, at a time when the desk raked in billions. The biggest US banks were yet to be burdened by the kind of regulations that would force Goldman and arch-rival Morgan Stanley to shed their tag of “Wall Street Refiners” — thanks to their outsize presence in physical commodities trading.
Emerson is among a handful of senior executives who have set up shop in Florida. In internal discussions, Emerson is known to relentlessly argue his views and sometimes clash with superiors. His bosses have been wary of dealing with him around bonus time, when he frequently pushes for higher pay for his team.
He’s also carved out a reputation for practical jokes at work and beyond.
While atop the unit, he took a vacation to Costa Rica and littered fake snakes around the house in the middle of the night to scare his travel companions.
“Ed was getting to a place in his career he was deciding what he wants to do next,” Waldron said Tuesday in an interview with CNBC, and he “cares a lot about the commodities franchise and about how it transitions.”
(Updates with new business heads in fifth paragraph, Waldron comments in last.)
By Sridhar Natarajan
With assistance from Tom Metcalf
