- Marty Chavez’s reassignment as CFO of Goldman Sachs ends an 18-month tenure that was met with mixed reviews from analysts and investors.
- Chavez will return to a new role running the securities division in the midst of a technology overhaul, a mission that aligns well with his computer science background.
- Chavez will hand the CFO’s books over to Stephen Scherr in early November.
Marty Chavez is getting a do-over.
The Goldman Sachs CFO, who was formerly the bank’s highest ranking technology executive, will give up his role and become one of three co-heads of the firm’s securities division in November, according to a memo sent to employees Thursday.
He’ll also become a vice chairman, filling a position most recently held by Pablo Salame, a vice chairman who also ran the securities division before leaving earlier this year. Both men are close to outgoing CEO Lloyd Blankfein.
Chavez’s shift caps an 18-month CFO tenure in which many investors, analysts and employees felt he often seemed out of his element. Some analysts grumbled that he wouldn’t appropriately answer their questions on the firm’s earnings calls. The company’s stock is on its worst losing streak since its 1999 initial public offering.
“Marty is not a person who came up through the finance organization,” Autonomous Research’s Guy Moszkowski said in an interview. “Therefore, it didn’t seem like it was his forte and with this it looks like he’s going back to something that looks like much more of a natural fit.”
Chavez, a technologist at heart, got his start in Goldman’s commodities unit, J. Aron, and worked his way up through the securities division. In 2013, he took over the firm’s equities division just as it required a needed influx of engineering know-how. From there he became the firm’s chief information officer, a job that put him in charge of the engineers who make up roughly a quarter of the bank’s workforce.
It was here that he began really pushing for an overhaul of the securities division’s technology approach, putting his weight behind a project to automate trading workflow known as Marquee.
When Blankfein tapped Chavez for the CFO’s job, he replaced Harvey Schwartz who had held the role for four years. Chavez worked to get up-to-speed quickly for his new role, asking his team in the first few months on the job to design dashboards for his iPad so that he could answer finance-related questions more quickly.
But his first days were rocky. In April 2017, Chavez’s first as the CFO, Goldman turned in a trading performance that ranked among the worst on Wall Street, even as competitors showed good results. He was left trying to explain the gap and left many wanting answers.
This year, the firm was forced to halt stock buybacks in the second quarter after last year’s corporate tax cuts reduced its capital levels. Investors assigned some of the blame to Chavez’s navigation of the stress test process, though the tax cuts were out of his control.
With his move back to the securities division he’ll be able to focus more on Marquee, the firm’s vision for the future of Wall Street. He’ll be replaced as CFO by Stephen Scherr, the head of the consumer and commercial banking division, in November. Scherr will give up his title leading Goldman’s growing consumer bank, though Moszkowski said he wasn’t worried about that project losing steam.
“It had been launched before he came into that job and it’s well launched and well on its way now,” the analyst said. “I don’t see it losing momentum because of this move.”
In other announcements, the bank said investment banking co-head John Waldron would become president and chief operating officer, the de facto right hand man to incoming CEO David Solomon. The two men have worked closely together since their days at Bear Stearns in the 1990s.
Goldman’s board, which was set to meet today, was briefed on the changes and signed off on them earlier today, according to a person with knowledge of those discussions.