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Morning Coffee: Credit Suisse and HSBC restructuring but not cutting jobs. Investors push back on Goldman, Citi comp

Credit Suisse and HSBC are reaching for the sky with their respective restructuring plans.

In an aggressive bid to increase its investment banking market share, HSBC brought on ex-Goldman Sachs banker Matthew Westerman as the head of the global banking division five months ago. He has since dismissed dozens of senior bankers as part of a restructuring effort and issued a mandate that various banking teams collaborate more closely, merging some units and creating incentives for working together across departments, Reuters reported.

Westerman has also forced investment bankers to log client visits and deals, dishing out punishments for those who don't spend enough time with clients.

"He's given people a kick, but HSBC has always been resistant to change, [and] a lot of people are waiting to see if this is for real or can they go back to doing things the old way in a year's time," a former executive in the banking division who left HSBC recently told Reuters.

Credit Suisse is also restructuring its IBD, largely in reaction to Brexit fallout, but Marisa Drew and Mark Echlin, co-heads of investment banking and capital markets in EMEA, gave assurances at a company-wide town-hall presentation that job cuts will be minimal at this time.

The co-heads of UK investment banking have been shifted around. Charles Donald is now the head of the newly combined UK advisory and corporate broking division, while Jonathan Grundy is the head of the newly formed EMEA infrastructure division, which includes the bank’s oil and gas, power and transportation teams, according to Financial News. Vikas Seth is now the global head of emerging markets.

Separately, big-wig investors in Goldman Sachs and Citigroup met recently and, fed up with what they perceive to be banking executives’ excessive pay packages, more are making their voices heard.

The results of votes cast by both banks’ shareholders, mostly made up of large fund managers, insurers and other banks, were surprising – one-third of those who weighed voted against the banks’ executive compensation practices, a verifiable revolt when compared to last year’s sanguine voting results.

Goldman’s CEO Lloyd Blankfein earned $33.1m last year, making him one of the the highest-paid bank CEOs in the world. Citigroup gave its CEO Mike Corbat a 49% raise, bringing his compensation up to $20.1m last year, according to Bloomberg. That said, the “say on pay” votes are non-binding, meaning shareholders can’t force compensation policy changes, so Blankfein’s and Corbat’s pay is more likely to go up than down … unless investors’ complaints reach a sympathetic ear on the board of directors.


Goldman is tapping Spotify to attract talented millennials. (Business Insider)

Starting next year, CFA exams will include more questions about corporate ethics, risk management and environmental, social and governance (ESG) issues. (Bloomberg)

The manager of the U.S. state of Nevada’s $35bn pension fund admits to doing next to nothing all day long. (WSJ)

“Do nothing” asset managers have been successful in this prolonged low-interest-rate environment, but eventually they will face comeuppance and demand for active managers adept at market timing will surge. (Price Action Lab)

Morgan Stanley, Goldman Sachs and J.P. Morgan increased market share by coercing hedge funds seeking financing to give the banks more stock-trading business. (Bloomberg)

Survey says? Hedge fund managers are very pessimistic about their compensation. (Bloomberg)

Don’t call it a comeback – hedge fund billionaire Steve Cohen’s been here for years. (Fortune)

J.P. Morgan is looking to exit its investment banking joint venture in China as soon as possible. (Reuters)

After several top Italian investment bankers have resigned to join the corporate sector, recruiters are stoking Brexit anxieties to lure talented Italian investment bankers back home. (Reuters)

The U.K. is apparently willing to do what it takes to protect free movement for bankers after Brexit. (FT)

Ireland, spurred by senior cabinet members, is looking to poach top talent currently based in London. (Irish Independent)

One loathed group of professionals is thriving in the aftermath of the Brexit referendum – attorneys. (Bloomberg)

Credit-rating giants Moody’s Investors Service, S&P Global Ratings and Fitch Ratings are likely to move many jobs from London to Ireland or mainland Europe if Theresa May botches Brexit negotiations. (Bloomberg)

Advice from a Goldman executive has caused an NBA star to already start planning out his second career even as he’s still in the prime of his first. (Business Insider)

A McKinsey report illustrates the importance of face-to-face schmoozing for your career – in fact, the best schmoozers are actually less likely to be laid off. (Knowledge@Wharton)

Trumpian selfishness and nastiness is currently en vogue, but a recent study found that people who behave pleasantly are likely to achieve more success and happiness over the course of their lives. (WSJ)

Photo credit: KIVILCIM PINAR/GettyImages

AUTHORDan Butcher US Editor
  • Yo
    Your Mommy
    21 October 2016

    "Goldman's CEO Lloyd Blankfein earned $33.1m last year, making him the highest paid bank CEO in the world."

    I guess PJT is not a banker then.

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