Why is no one leaving Goldman Sachs?
When Lloyd Blankfein was on Charlie Rose, he said that one of the reasons Goldman does so well is that it hires and then retains the best people.
Now it seems that Goldman has been retaining too many people. Because so few senior people have left, the bank will apparently need to 'brutally cull' 'dozens' of its 400 partners later this year before it can promote some new ones.
Why aren't Goldman's senior people leaving? It might have something to do with the fact that...
- They're still waiting to get paid
For 2009, Goldman's 100 London partners had their pay capped at 1m.
"Because the partners weren't paid as much as they expected last year, a lot have stayed on in the assumption that they will be compensated at an appropriate point in time," says one London headhunter.
- They can't go into government
Former senior Goldman bankers have a history of going into public service. What with the bank's waning public popularity, this is probably no longer an option.
- They can't afford it
Goldman's share price is down 15% since the start of this year, and 40% since its peak in October 2007. Big spending Goldman partners with most of their money in stock may be waiting until the price rises before they cash out and buy a large yacht.
- Nowhere else matches up
Although there have been departures of Goldman partners to other banks (Salvatore di Stasi to UBS, Sanaz Zaimi to Bank of America, Gene Reilly to Bank of America), headhunters say Goldman Partners are loathe to move anywhere else because nowhere else is as good. "Where else is in better shape?" says one.
- They're pulling together
According to the Daily Beast, Goldman bankers are showing Stepford wives style solidarity in their time of trouble. They may feel that now's not the time to be making an exit as a result.
