When you make MD at Goldman Sachs but only last 3 years
On average, it takes 14 years to make managing director (MD) at Goldman Sachs. But what if - after all that grind to get to the top - you stay there for less than three years.
This appears to be the unfortunate fate of Daniel Strack, former COO of Goldman Sachs' U.S. agency execution and trading business in the Americas. Strack joined Goldman in 2001, made MD in 2013 and left this September. He's now looking for a new job.
Strack's exit comes as Goldman prepares to announce its biannual promotions to the partnership. Goldman Sachs partners are well remunerated. Salaries in London can be £600k+ and $748k in the U.S. Partners have their own ring-fenced bonus pool, but partnership too can be a fleeting thing. Many of the partners to 'retire' from Goldman Sachs this year were promoted in 2008 or 2012, while longer-established partners with deeper support networks are still around.
Post-promotion exits at Goldman aren't the norm. The average tenure of MDs at the firm is thought to be around 11 years, while the average tenure of a partner is thought to be around eight years. Our own random sample of 30 MDs promoted in 2013 suggests just 10% have moved on - two to other banks, while one (Eric Kramer, an MD in high-yield credit sales 'decided to quit' this year).
Even so, it's worth remembering that just because you scale the slippery pole to become a Goldman grandee, you might not have the energy or luck to stick it out at the top. Becoming an MD means you simultaneously become expensive and that's a bad thing when banks are cutting costs. Managing directors in M&A, for example, complain of "relentless pressure to bring in revenues," and are having their whereabouts monitored as banks try justifying their giant pay.
Strack's exit from Goldman, meanwhile, seems unusual. Strack is an expert in low touch algorithmic trading and has the sort of experience across technology and operations and trades that's supposed to be de-rigueur right now. Goldman, however, is making changes big to its electronic trading operation as CIO Marty Chavez spearheads a series of applications known as Marquee which will allow clients direct access to Goldman's SecDB risk and pricing tool among other things. In the new world of data analysis and visualization, maybe expertise in low touch algorithmic trading and smart order routing is already surplus to requirement?