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Jim Esposito's pay at Citadel Securities: "Probably well into nine figures"

An AI rendering of Jim Esposito emerging from a pile of dollars

Jim Esposito is back. Not at Goldman Sachs, but Citadel Securities. Not in London, but Miami. Not as a co-head of banking and markets, but as Citadel Securities' "first ever president", a role in which he will assist with Citadel Securities' "expansion into new products and markets," and be busy growing Citadel Securities' "clients and partnerships." 

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Given that 56-year-old Esposito was tired when he left Goldman and said he'd merely been "merely going through the motions" during his latter days there, it's reasonable to wonder how much Citadel Securities is paying to revive his enthusiasm. Inevitably, Citadel Securities is not saying. Speculation is, however, rife.

One former colleague of Esposito's at Goldman suggests $20m a year is reasonable, given Esposito's 28-year tenure at Goldman. A US headhunter who works with hedge funds and electronic trading firms suggests Esposito's pay is probably "well into nine figures, at least." 

A senior figure at a London electronic trading firms says Esposito's pay will likely have been structured over a multi-year period and could be as high as $100m, with a get out clause: "Esposito might have a $20 million per year guarantee for, say, four years, plus a $20 million welcome bonus. This could be presented as a $100 million package over the period. However, if things don’t work out, and he leaves after 18 months, he would likely only receive the welcome bonus and the guaranteed portion for that period."

Another senior quant suggests Espo is likely receiving "50-100 basis points" of Citadel Securities' PnL. The firm made $2bn of EBITDA in three quarters last year, so if this were true, Esposito might be receiving $13m to $26m a year.  Another ex-Goldman MD suggests Esposito's pay will likely be tied closely to whether the connections he made during his Goldman career bear fruit at  Citadel Securities.

What Citadel Securities seemingly won't have done is to have bought out Esposito's Goldman Sachs stock when he left. Although Goldman has become stricter about recovering stock from executives who leave, Espo will have benefited from the firm's "rule of 60," which says that when Goldman people's age plus tenure reaches 60 they can leave with all their unvested stock. 

The big unanswered question is whether Espo has been given stock in Citadel Securities. It's not clear that he has, but given that he'll be reporting to chief executive Peng Zhao, it seems entirely conceivable. The FT notes that Citadel Securities was valued at $22bn when it sold a $1.2bn stake to venture capitalists two years ago and there have been suggestions that an IPO is possible, soon... 

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Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

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AUTHORSarah Butcher Global Editor
  • ug
    ug
    31 May 2024

    Why would he receive a percentage of the PnL of a business that’s already successful without him? I think a more reasonable expectation is 1.5-2x his prior comp, for 2-3y (especially since he doesn’t have a deferred buyout).

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