That managing director in your office - the one who said he was out meeting clients all last week and the week before, and two weeks before that. Was he really meeting clients? Or was he actually lounging by the pool in a pleasant place sipping cocktails and contemplating his bonus?
It's a question worth asking in light of last year's study by Erin Reid at Boston University. Reid (now) famously studied men and women at 'a global strategy consulting firm with a strong U.S. presence.' She found that the female consultants often opted to work part time while the men pretended to be working 80 hour weeks while actually doing other things. “I skied five days last week. I took calls in the morning and in the evening but I was able to be there for my son when he needed me to be, and I was able to ski five days in a row,” said one, adding that these were all work days rather than vacation days.
Anecdotally, similar things have gone on in M&A. "I know a client who went on a cruise and told the bank he was traveling," says Andy Pringle at London recruitment firm Circle Square. "The problem for senior bankers is that it's difficult to quantify what's work and what's not," he adds. " Often, your clients will be your friends, so if you go shooting with them or have a meal with them, is that work or is it pleasure?"
HSBC seems to be asking just that question. Matthew Westerman, the former Goldman Sachs banker who took over as head of HSBC's global banking division in May is reportedly compelling his bankers to use a system that tracks exactly how they use their time, exactly how many clients they visit, and exactly how many deals they bring in. Seemingly gone are the days when you could mooch into the office at 11am before leaving for a 'client lunch' and reappearing at 4pm for two hours. HSBC bankers are said to be unhappy as a result.
One New York-based MD in M&A says HSBC's system sounds "Orwellian," and that most banks are more gentle in the way they keep tabs on client-facing staff. "Management have access to my diary, but I'm not aware of any systematic checking," he says. He adds that most senior M&A bankers are effectively corralled by the "relentless pressure to bring in revenues," and that those who "screw around" don't last long.
Even so, HSBC clearly felt the need to check up and it's easy to see why. The bank is trying to boost revenues in its global banking business whilst culling senior investment bankers to cut costs. It can't carry any dead wood.
Will other banks start doing the same? 2016 hasn't been a great year for M&A, despite big headline deals like Time Warner AT&T: global M&A was down 22% in the first nine months according to Dealogic. Jim Reid, global markets strategist at Deutsche Bank cautions that M&A might slow further in the final quarter, what with the U.S. election, the Italian referendum, central bank uncertainty and Brexit. At Goldman Sachs, Citi and Bank of America, M&A revenues in the first three quarters were all down substantially on 2016.
In the circumstances, you can see why banks might want to keep a stronger handle on the MDs who are supposed to travel the world drumming up business. They can't afford to do otherwise: Phaidon International puts the average total compensation for an M&A MD on Wall Street at $2.25m.
At the same time, MDs are under more pressure to spend time in the office, coaching juniors and exuding the kind of joie de vivre that will encourage banks' young hires to see investment banking as a long term career rather than something for notching up CV points.
It all suggests the MD role is changing. Less freedom. More monitoring. Less freestyle 'travel'. And less fun.