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Morning Coffee: The reverse Goldman Sachs bonus amplifier. When boutiques lead to career stasis

Works both ways

Works both ways

Tomorrow is when Goldman Sachs announces its fourth quarter results. There will, as ever, be considerable focus on the size of the firm’s compensation bill. Much will be made of the bank’s generosity. Less will be said about the times when Goldman deducts bonuses from employees who don’t make the grade.

Take, for example, the ‘Banco Espirito Santo affair.’ Goldman lent Espirito Santo $885m in July through an entity called Oak Finance. When the Portuguese bank fell into difficulties several months later, creditors were wiped out – Goldman Sachs included. Reuters reports that several of Goldman’s bankers held a conference call on Christmas Eve to discuss how writing off the loan would affect employee bonuses. So far, so standard – what’s notable is that although only 20 Goldman staff were directly involved with the Espirito Santo deal, Reuters claims that 50 people at the firm will have their bonuses negatively impacted as a result. However generous Goldman Sachs is on the upside, it’s equally punitive when things go wrong.

Separately, boutique banks are all the rage. Last year they accounted for 29% of all global M&A fees. But if you move to a boutique, you risk waiting years for a promotion. Financial News reports that Greenhill has just promoted one person to managing director in London – its first European MD promotion for two years.

Meanwhile:

Patrick de Nonneville, the former co-head of European interest-rates trading at Goldman Sachs, has left the bank and is working with a new company focused on lending for small and medium-sized businesses in France. (Bloomberg) 

If you want to become a partner at Goldman Sachs, you now need to impress Pablo Salame, directly or otherwise. (Bloomberg)

J.P. Morgan said its trading revenues will continue to decline in the first quarter. Expect a drop of around 10% due to the sale of some of its ‘related businesses.’ In the fourth quarter, fixed income sales and trading revenues at J.P. Morgan fell 23% due to the sale of a commodities business and low volumes in credit and securitized products. (Bloomberg) 

J.P. Morgan finance chief Marianne Lake singled out weak trading in interest-rate products. (WSJ)

Jamie Dimon says they’ve always tried to be very tough on compensation. (Fox) 

J.P. Morgan’s results look like good news for Morgan Stanley’s equities business. (WSJ) 

Moulds is an accomplished violin and viola player. He boasts a world-renowned collection of musical instruments including several Stradivarius violins, earning him the nickname in some circles of “Stradivarius Jonty”. (Financial News)

Man tasked with recruitment at SAC Capital raises his own $1bn hedge fund. (WSJ)  

If you want to appear intelligent, you need to look at others while you speak, sit upright, use a middle initial and wear glasses.(WSJ) 

How you really sound in job interviews. (Fast Company) 

The less powerful you are, the more you smile. (TheBroadExperience)

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