Goldman Sachs Group Inc. is losing stock-trading rainmaker Joe Montesano, a key player in its ascent to the industry’s No. 1 rank in equities for two straight years.
(Bloomberg) — Goldman Sachs Group Inc. is losing stock-trading rainmaker Joe Montesano, a key player in its ascent to the industry’s No. 1 rank in equities for two straight years.
The 46-year-old recently informed the firm he is stepping down as head of equities trading for the Americas and leaving to take a break, according to people with knowledge of the situation. He has yet to line up another job.
He’s among a group of top producers at Goldman whose pay has rivaled the more than $75 million awarded to Chief Executive Officer David Solomon over the three-year Wall Street trading frenzy set off by the pandemic. In 2021, Montesano even out-earned Solomon’s $35 million package, nudged ahead by his global oversight of the bank’s lucrative program-trading business, the people said, asking not to be named discussing confidential information.
The program-trading desk generated more revenue per employee than almost any other team at the investment bank that year. And the firm’s broader equities business pulled ahead of JPMorgan Chase & Co.’s and Morgan Stanley’s in both 2021 and 2022, with cumulative revenue of almost $23 billion.
The business is expected to slow down this year with analysts expecting an additional decline of roughly 6% in equities revenue at Goldman. That would still leave it substantially higher than what it was posting before the pandemic.
A company spokesperson declined to comment.
Montesano joined Goldman in 1999, the same year it went public, working for a subsidiary, Hull Trading, known for quantitative- and technology-driven strategies. He bounced around various equities posts before snagging the top US-based equities-trading job.
What Goldman calls program trading is better known in the industry as an index-rebalancing business. It develops systems to predict which stocks will be added or knocked out of benchmarks because of mergers, earnings growth or slowdowns. That business had breakout years in 2020 and 2021 before cooling.
To keep ahead of rival banks and vie with the world’s most sophisticated hedge funds in that arena, Goldman assigns traders and coders to help develop mathematical models and software tools that it uses to deploy its own capital. Traders on the team are compensated with an eye on keeping them from being poached by other banks or buy-side shops, making it one of the most envied spots at the firm.
(Updates with equities trading forecast for 2023 in fifth paragraph.)
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