Making it to managing director is increasingly a pipedream for many investment bankers. Annual MD promotion classes are getting smaller, mid-ranking bankers are stuck in career stasis and, if Goldman Sachs is representative of the industry, only 6% of employees get bumped up.
And yet, relatively speaking, Goldman Sachs is the bank most likely to promote you to MD earlier – at least in London. By analysing the profiles of 3,375 investment bankers from 2013-2015, salary benchmarking site Emolument.com has concluded that it takes an average of 12 years to reach managing director at Goldman Sachs. Morgan Stanley is second with an average of 14 years’ experience, followed by Bank of America Merrill Lynch (15 years).
In other words, working at Goldman Sachs is your best chance of making MD before you hit 40.
SocGen, Lloyds Banking Group and Nomura all bring up the rear with an average of 19 years’ experience within their MD pool. SocGen also doesn’t reward its more seasoned bankers – average MD compensation was £354k ($545k), the lowest of any investment bank.
What does this imply about the realities of making managing director? Analysis of the latest crop of MDs at Morgan Stanley suggests loyalty is (eventually) rewarded – a large proportion of the class of 2015 had spent the vast majority (if not all) of their careers at the U.S. investment bank.
Goldman Sachs, similarly, tends to do much of its hiring at analyst and associate level and frowns upon those who leave the bosom of the ‘firm’ for another job opportunity. Goldman prides itself on long staff tenure – in 2011 its CEO Lloyd Blankfein said that the average tenure of MDs was 12 years (and rising) and that its management committee had been at the bank for an average of 22 years.
Job-hopping isn’t always a wise move.