There’s a new policy similar to the Wall Street rule preventing hiring managers from asking candidates about their compensation history, but this one applies not just to New York, but to the entire world, representing a huge change in financial services pay negotiations, especially in London and Asia.
Bank of America Merrill Lynch is imposing new restrictions on inquiring about a job candidate’s salary history with the stated goal of helping close a gap between how much women and minorities are paid compared with white male employees.
HR sent out a company-wide saying that the policy will take effect in March and “restricts how we solicit compensation information from candidates during the hiring process … to help ensure we consider new hires for individual qualifications, roles and performance, rather than how they may have been compensated in the past.”
In the U.S. overall, women earned 83% of what men made in 2015 and black Americans’ compensation was about 75% of the rate for whites, according to the Pew Research Center.
“The end-game is moving more women and minorities into leadership and then reaping the benefits that diversity affords,” Natasha Lamb, managing partner at Arjuna Capital, a Bank of America shareholder, told Bloomberg.
There have been fears that the New York 'salary history rule', introduced in November 2017, will mean that banks simply low-ball candidates with offers until they reach a number the candidate accepts. In this way, they won't be asking about salary expectations or history, but will still arrive at the lowest possible number for making a hire. The rule also means that bankers who received bad bonuses won't have to divulge them during the interview process, which could lead to them receiving higher offers than they would if the small bonus were known.
Separately, hedge fund managers have a superpower that is enabled by, but not directly connected to, their knack for making money: their ability to influence politicians to do their bidding. When an idea is suddenly getting attention among policy-makers in Washington, D.C., it’s often due to well-placed donations from hedge funds.
Over the past 20 years, hedge funds have grown explosively, with a collective $3.4 trillion under management. Rather than make bets and watch from the sidelines, the largest funds try to steer government outcomes so that their investments are likelier to pay out. A lobbying campaign seems cheap in comparison to the billions of dollars at stake on a given wager.
However, hedge funds know that they’re politically toxic – portrayed by both parties as overpaid plutocrats – and prefer that much of these offensives be conducted in secret. They hire Washington public affairs firm DCI to provide credible-seeming experts to speak up for the funds’ interests without disclosing that the experts are being paid to spout crafted narratives supporting policies from which hedge funds would profit handsomely. It’s not illegal, but it undermines basic principles of transparency and trust, according to Bloomberg.
Bank of America Merrill Lynch is offering a fast-track promotion process for its 2017 analyst class in an attempt to keep other firms from poaching their best junior bankers. (Financial News)
J.P. Morgan CEO Jamie Dimon said he could cut more than 4,000 jobs from the bank’s London workforce if the U.K. doesn’t reach a suitable Brexit deal with the E.U. (Reuters)
Since the Republican tax law was passed, there have been 11 M&A deals above $5bn announced as of Jan. 23, and the value of all announced deals during the period totaled $207bn, the highest amount since the same period of Jan. 2000. (WSJ)
Wells Fargo hired Julien Pajot as an MD and the head of technology, media and telecommunications for EMEA in London. (Financial News)
Citigroup has promoted Jose Cogolludo to be global head of commodities, replacing Stuart Staley, who was recently named head of its Asian markets and securities services business. (Reuters)
The U.K.’s Financial Conduct Authority wants to ban ex-Barclays executive Andrew Tinney from senior positions in the finance industry because he allegedly misled colleagues and regulators about a critical report. (Bloomberg)
The World Bank’s president wants it to be more like a Wall Street firm and regularly hobnobs with bankers and fund managers. (New York Times)
Last year, U.S. startups collected more than $67bn in venture-capital funding, a new record. (Bloomberg)
Goldman sank millions of dollars into a startup but ended up suing it for fraud, (WSJ)
The president/COO of PE giant Blackstone Group has teamed up with an econ professor to proposes a bold idea that is raising eyebrows across the asset management industry. (Bloomberg)
Childcare, or lack thereof, is one of the biggest pain points for professional women returning from maternity leave. (Recode)
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