Goldman Sachs decided to show its junior bankers some love by bumping up salaries by 20% in an attempt to convince top graduate talent not to jump for a job at a Silicon Valley (or at least work 100 hours a week less grudgingly). Most other banks have followed suit.
Now, it’s showing its senior bankers just how tough it can be. Goldman is set to announce a mere 70 partners this year, the smallest number since the firm went public in 1999, says the Wall Street Journal. Across the organisation there are just 409 partners at Goldman Sachs, a figure that goes both up and down each year as former partners leave the firm to start their own hedge funds or move into private equity. At its peak in 2011, the partnership numbered 480.
The hallowed status pays a base salary of $900k and is likely to offer many more times that in bonus payments. Most investment banks keep managing director as the most senior role, and the partnership position at Goldman is a hangover from its days as a private company. However, Goldman’s decision to limit the number of promotions this year is indicative of a broader trend within investment bankers to cut back on expensive senior staff and focus on junior recruitment.
Observers told the Journal that Goldman’s move is directly related to the slump in revenues this year, but it could also a method of ensuring only the most elite candidates make it to the top. Sources suggest that Goldman could end up promoting more than 70 if they make a strong enough case for their inclusion. Michael Sherwood, the bank’s vice chairman, is the man to impress – he’s leading the committee that makes the decision on who makes it to partner.
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