While the U.S. takes in the implications of a Donald Trump victory, Goldman Sachs is bringing to an end its own internal campaign of political wrangling – the bi-annual partnership promotion process.
Goldman Sachs is to anoint a new round of partners in its bi-annual promotion round later today. Partners are a shrinking breed – two years’ ago just 78 made the cut and Goldman’s slowly seeping layoffs at the top this year have meant that that many potential candidates have ‘lost their rabbi’, as current partners and potential sponsors make way for the new round of promotions.
Career paths in investment banking are relatively straightforward. There’s a set number of years you must stick it out at analyst and associate level before you’re bumped up to VP and, while the road gets rockier in the middle ranks, promotions are generally predictable.
Goldman partners are a whole different ball game. For the past nine months MDs in London and Asia have been flying to New York to be more visible to senior management. They’ve been schmoozing as many possible advocates in the organisation. The whole ‘cross-ruffing’ process involves current partners nominating Goldman Sachs MDs for potential promotion. The names and performance reviews are then submitted to senior partners who in turn interview other partners to see if these MDs are worthy.
Note that there have been no leaks. The political wrangling over the past nine months has been kept entirely in-house. A select few will be waiting by their phones for the call from Lloyd Blankfein, Gary Cohn or Michael Sherwood later. Sherwood has, however, warned previously that partner status is not without its sacrifices: “Part of being a partner is putting your own personal ambitions behind the ambitions of the firm, especially in difficult years,” he told Financial News in 2012. This could be described as a tough year for the ‘firm’, which has been making deeper job cuts than usual.
Former Goldman Sachs partner Joseph Mauro, who was head of fixed income, currencies, and commodities European hedge fund sales and co-head of European macro rates sales until his departure in May, wrote a consolatory note for all those who’s phone will not ring today. His implication is that those in technology and operations are less likely to be promoted. However, the latest round of MD promotions favoured technology and Goldman’s ‘Federation’ (non-revenue generating divisions), so there could be some surprises.
Separately, Milan Radia, a managing director and research analyst at Jefferies in London, is claiming disability discrimination against the bank because of its behaviour towards him after he was diagnosed with leukemia.
Radia says he was promoted to managing director a month after being diagnosed in November 2009. He returned to the bank in June 2010 to find that his bonus had been “reduced to a pro rata rate” and cut by two thirds to £192k ($237k) because he took time out for treatment. He didn’t get a bonus in 2011, received a “very poor” bonus of £50k the following year, £32k in 2013 and no cash bonus in 2014. Other MDs received £152-319k in 2012, he says. Radia claims that the bank tried to force him to quit through a combination of parsimonious bonuses and charges of gross misconduct.
Jefferies denies the claim.
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Banks are bringing in extra staff to deal with the expected upsurge in activity after the presidential election (Reuters)
Barclays has economists ready to offer some late night advice to clients (Telegraph)
Hedge fund AQR Capital Management is using state-funding to hire 200 people (Greenwich Times)
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Jamie Dimon’s Donald Trump impression (Euromoney)
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Nomura has bumped up two senior bankers in client relationship roles in London and New York (Financial News)
Brexit lobby group for the City of London is demanding no change to the current arrangements when the UK leave the EU (Financial Times)
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