After multiple quarters of poor results, it seems that Goldman Sachs has had enough. Co-head of securities Pablo Salame said last April that he was “tired of losing” and urged his team to be more solicitous of the small things they could do to keep clients happy. Last week, Goldman CFO Marty Chavez disclosed that the firm is going one step further and holding its managing directors (MDs) to account for their shortcomings.
“We just came out with some internal discussions with our global managing directors where everybody knows that we’re holding them accountable,” said Chavez during last week’s investor call. MDs have been reminded that investors are holding senior Goldman staff accountable for the firm’s performance, said Chavez. He added that the firm’s “accountability matrices” have a lot of detail.
Goldman’s warning to its MDs follows its promotion of 509 people to managing director last November in its biggest class of MD promotions ever. Existing MDs are therefore under pressure from their new senior colleagues. They’re also under pressure from lateral hires both at managing director and executive director level as Goldman brings in new blood.
Goldman’s attempts to hold its MDs to account for their under-performance risk ramping up pressure in the firm at a time when one former partner claims performance is already being dented by internal politicking. “The senior and mid-level people in FICC at Goldman today spend 99% of their time managing their upward images instead of their client reputations,” he told us last week. Traditionally, Goldman has had a reputation for team work and for being the least political large bank to work for.
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