Morning Coffee: Goldman vs. Smith, No Contest
Excerpts from Greg Smith’s highly anticipated insider’s look at Goldman Sachs have been leaked, and the revelations are less damning than they are inane. He tells us that one Goldmanite once expensed a $1 Chapstick and Chief Executive Lloyd Blankfein was caught “air-drying” himself in the gym. And?
More instructive is Goldman’s concerted reaction to the book, which is a reminder to anyone working at a very large institution employing a lot of extremely smart rich people that you’ll probably get squashed if you take them on.
Goldman launched an internal investigation following Smith’s scathing op-ed about the firm in the New York Times and found… that Smith wasn’t such a good guy after all. In documents it leaked to Bloomberg, among others, Goldman says that Smith told his boss that he expected to be promoted to a managing director role with a $1 million-plus salary at a time when he was earning $500,000 and the company had just laid off a tenth of its workforce.
Smith also finished in the bottom half of the firm in regular evaluations since 2007, which may be why Goldman never made him an MD and kept him as the lowest paid vice president from his training class. By the time Smith handed in his resignation letter, citing concerns about the firm’s direction, Goldman had already “discussed the possibility of Greg’s departure from the firm,” according to Bloomberg.
As John Farrell, JPMorgan Chase’s former human resources chief, noted: Words written by a former employee should be taken “with a grain of salt.”
Recently departed Citigroup chief executive Vikram Pandit made tens of millions of dollars when he sold his hedge fund to the bank in 2007. In the following five years, Pandit didn’t take all that much from Citi, mostly due to the bank’s poor performance.
Barclays is eliminating about 50 positions in its Europe, Middle East and Africa equities unit. The cuts, which reportedly began this week, will affect around 10% of the firm’s EMEA staff.
European officials have agreed to create a banking supervisor that will enable the direct recapitalization of struggling European banks as soon as early 2013.
Dave Einhorn made the right call to suggest investors short Chipotle, as the Mexican fast food chain essentially laid an egg in the third quarter, even if his reasoning was flawed.
As you may know by now, Morgan Stanley CEO James Gorman thinks bankers are overpaid. Come the end of the year, Gorman may rethink that sentiment. The bank is on pace to miss its average return on equity mark, which would result in Gorman losing nearly $3 million in bonuses.
UBS plans to make additional cuts to its equities and fixed income business in Europe. As many as 400 employees, or roughly 10% of the unit’s front office, are on the chopping block.
Buzz Around the Office
A closed-captioned video glitch has left Brown University students with a slightly misinformed view of Buddhism. In a recent campus speech, the Dalai Lama attempted to tell students to “forget it.” Unfortunately, a different F-word popped up on the screen, one of the four-letter variety.
List of the Day: No Promotion
Being passed over for a promotion can be painful, but it’s no reason to quit your job. Here’s what to do next.
- Control your emotions. Getting angry or sulking will do you no favors.
- Sit down with your boss to understand why you weren’t chosen.
- Agree on milestones that, if met, put you in a position to get the next promotion.