Goldman Sachs Latest Wall Street Giant To Move Traders To Florida After NY Tax Hikes

Goldman Sachs employees finally returned to the office this week (for at least part of the work week). But at least some Goldman employees who miss working from the beach, the bank might soon be moving some of its front-office workers from NYC down to sunny Florida, becoming the latest major Wall Street firm to beef up its operations in the Sunshine State.

Goldman will join Carl Icahn, Dan Loeb’s Third Point, the private equity giant Apollo and a host of other firms in moving more employees to Florida, a state that, among other perks, has no income tax, according to a report published Monday by Insider.  But talk of the bank moving some of its personnel has been circulating since at least late last year.

Per Insider, Goldman “is in the early stages of moving traders and salespeople to Florida,” and the leaders of its global markets group have recruited about 100 or so people to move down south, according to sources “with knowledge of the plans.”

The fact that Goldman is moving some of its top-earning personnel to Fla. is extremely significant, as one of Insider’s sources pointed out. And it doesn’t exactly bode well for New York, which is struggling to convince firms to stay after the state raised taxes that make the state one of the most heavy taxers in the country. The moving of front-office traders and salespeople away from the world’s financial hub is a “once unthinkable outcome for a firm that has considered New York home for 152 years.” And in all likelihood, it wouldn’t have happened without COVID-19.

What’s worse (as far as the Empire State’s tax base is concerned) is that many of the bankers who will be moving earning 7-figure salaries, meaning that once the move is over, New York Stat could be facing down a drop in revenue in the tens of millions of dollars.

Goldman’s senior executives would take an active role in deciding who gets to move and would look to relocate clusters of teammates to the West Palm Beach office, one of the people said. Each cluster would be an offshoot of a larger team based in New York and made up of as many as eight or 10 people.

Setting it up that way would ensure that employees still enjoy the benefits of working with close colleagues even though they’re 1,200 miles from the bank’s headquarters. Employees in Florida would likely spend significant time shuttling back and forth to New York for face time with executives working from Manhattan, one of the people said.

The division’s leaders are agnostic about whether credit traders or interest-rate salespeople make the move, though those covering the emerging markets from New York may find Florida an easier location for working with Latin American clients, one of the people said.

The move makes sense considering that one of Goldman’s top traders already commutes to New York from Boca Raton. As it happened, having at least one of its top traders in Fla. during the pandemic turned out to be a godsend for the bank, since they were able to meet with clients face-to-face more than six months before bankers in NYC were able to.

Goldman’s sales-and-trading operation is led by Ashok Varadhan and Marc Nachmann. While Varadhan lives in New York, Nachmann commutes to New York from a private development in Boca Raton, Florida, according to real-estate records.

Florida has been Nachmann’s home for more than 15 years, according to two people with knowledge of his arrangement. During the pandemic, his Florida base meant Nachmann met with clients in person roughly six to eight months before New York reopened, one of the people said.

Insider reports that Goldman’s plans for relocating some of its top people to Florida started taking shape even before COVID. It started when one of the top executives in the bank’s asset-management arm stated exploring a potential move, just as more buy side firms (and more of the bank’s clients) were heading to Florida. When CEO David Solomon caught wind of GSAM’s plan, he decided to expand the project and explore moving even more personnel to the famously low-tax state.

While it’s not exactly clear when these traders will be leaving, one thing is clear: New York State and its leader, Gov. Andrew Cuomo, are the biggest losers here.