Damian Stewart: Navigating Complexity and Competition

In today’s increasingly complex commodities landscape, talent has become the defining competitive advantage. As the sector grows and diversifies, compensation is evolving beyond a mere financial tool to become a central pillar of organisational culture, argues Damian Stewart, HC Group's Managing Partner.

Commodities Compensation: Navigating Complexity and Competition 

Today, the global energy trading landscape is more dynamic than ever, shaped by an expanding and increasingly diverse set of market participants. Established powerhouses, including major trading houses, investment banks, oil majors, and merchant utilities, now operate alongside a new generation of commodity focused hedge funds, algorithmic liquidity providers, and state-sponsored resource champions.  

However, at the heart of this sector’s complexity lies its human capital. While commodity trading gross margins have begun to normalise following a period of extreme volatility and outsized returns, the operating environment remains as complex as ever. Commodities professionals must now navigate an increasingly intricate web of geopolitical uncertainty, technological disruption, macroeconomic turbulence, and evolving regulatory frameworks.  

In this recalibrated and competitive market, firms must strike a delicate balance: remaining attractive to top-tier talent whilst optimising cost structures to protect long-term competitiveness. With that in mind, compensation strategies must be viewed as a strategic tool that defines culture, drives performance, and strengthens long-term institutional resilience. 

Compensation and Culture: A Symbiotic Relationship 

Compensation in commodities trading is not just a financial mechanism—it is a defining element of culture. Unlike in many other industries, where compensation structures follow standardised career ladders, the commodities sector operates on a wide spectrum of reward mechanisms, each shaping distinct operating cultures. Some firms embrace an “eat-what-you-kill” model, reinforcing a high-stakes, entrepreneurial ethos where compensation is directly tied to individual P&L. Others adopt team-based or long-term incentive structures, fostering collaboration, risk-adjusted performance, and institutional knowledge retention.  

Another defining characteristic of the sector is the high transferability of its unique skillsets, enabling talent to seamlessly transition across different trading environments. How firms choose to value and prioritise these skills directly influences their corporate identity and organisational culture.  

The most effective reward structures do more than incentivise performance; they align financial incentives with long-term strategic objectives, ensuring both retention and sustained competitive advantage. In a market where top-tier talent is highly mobile and competition is fierce, firms must carefully balance compensation philosophy with cultural cohesion.  

Talent Strategies in Transition 

The talent market in global energy & commodities trading is also changing rapidly. Increasingly, firms are looking beyond traditional trader profiles, sourcing talent from data science, quantitative finance, and engineering disciplines. Simultaneously, the sector is contending with a wave of retirements among veteran traders—the professionals who shaped the modern trading landscape in the 1980s, 1990s, and early 2000s. 

This demographic transition poses both risks and opportunities. The potential loss of decades of institutional knowledge, strategic insight, and client relationships could weaken firms’ market positions. Conversely, it opens the door for a new generation of leaders to bring fresh thinking and technological fluency. In this environment, compensation takes on a new strategic role—not just as a tool to reward past performance but as a mechanism to secure future leadership and continuity. 

Adapting to the Future of Commodities Trading 

Looking ahead, the next phase of commodities trading will be defined by efficiency and agility as firms navigate tightening margins, regulatory reform, and rapid technological advancements. Success will hinge on leaner operations, faster decision-making, and the ability to optimise capital and risk in real time.  

To support this evolution, compensation structures must adapt—moving beyond pure P&L-based rewards to incentivise cross-functional collaboration, long-term value creation, and resilience in volatile markets. Moreover, the expectations of the next generation of talent are shifting. While performance remains critical, today’s professionals are also seeking stability, development opportunities, and alignment with their values. Leading firms recognise that to remain competitive, they must offer more holistic reward packages that reflect these emerging priorities. 

In an industry where talent is the ultimate competitive advantage, getting compensation right is more than just a necessity—it is a strategic imperative.  

Damian Stewart

Managing Partner, HC Group