Goldman Sachs Strengthens Management Committee with Five Additions

US banking giant Goldman Sachs Group enlarged its management committee by adding five senior executives.

The bank promoted Paul Russo, Michael Daffey, Justin Gmelich, Sarah Smith and Craig Broderick to the management committee, raising its strength to 34 members, according to media reports citing staff memos.

The memos were signed by CEO Lloyd Blankfein and president Gary Cohn.

"Paul, Michael and Justin are responsible for very significant business and client relationships and will bring valuable perspectives to the Management Committee," one memo said.

In another memo, referring to the appointments of Smith and Broderick, Blankfein and Cohn noted: "These appointments reflect the firm's focus on strong financial controls and risk management."

This is the company's largest addition to its top leadership group since 2008. The group represents senior executives across trading, investment banking, asset management, finance and other key operations. The committee is responsible for developing and implementing the bank's broad strategy and business principles.

Russo and Daffey are heading the firm's equity-trading operations, while Gmelich is in charge of the credit-trading unit. Broderick is chief risk officer, and Smith is controller and chief accounting officer.

All of them joined the bank before it went public in 1999. Broderick and Russo became partners of the bank in 2000, followed by Smith and Daffey in 2002 and Gmelich in 2004.

Sweeping Changes

On 10 February, Goldman Sachs named Ashok Varadhan as the third co-head of its trading division. The bank has recently witnessed sweeping changes across the senior ranks under CEO Lloyd Blankfein.

At the start of 2012, the securities business was run by three different executives, two of whom have left the company and the remaining one, Harvey Schwartz, became the CFO replacing David Viniar last year.

As a number of highly-paid partners left the company since 2011, its younger employees moved up to top ranks. At the same time, the bank saved a lot in employee costs from the development. While the bank's headcount declined by 8% from 2010, its compensation costs fell by 18%.

The senior-level changes are also part of a gradual succession plan to give the bank a solid ground when Blankfein retires, according to company executives.