Goldman Sachs gave its exceptional 26 year-olds a big pay rise
Goldman Sachs just made some promotions. Not partner promotions, which happened in November. Not managing director promotions, which happened in November last year. It's lower key than that: the firm just promoted some of its analysts to associates and some of its associates to vice president (VP).
Unlike MD and partner promotions, which alternate and happen biannually, Goldman promotes its analysts and associates every year. What's unusual in 2016, is that some of the people it's promoted are a lot younger than before.
Historically, juniors in investment banks have spent three years as analysts and three and a half years as associates before even getting a sniff at the vice president title. However, as of November 2015, Goldman has begun promoting young people in its investment banking (IBD) division more quickly. Goldman's IBD analyst programme is now all over within two years and "top workers" are promoted to associate three and a half years later.
In other words, it's possible to make VP at Goldman Sachs one year earlier than previously, thanks entirely to the truncation of the analyst stage.
So far so good....except, Goldman insiders tell us that "a few" of those just promoted to VP were only made associates in 2014. In other words, it looks like Goldman has truncated its associate program for top people as well as its analyst program: the best associates are being promoted to VP after two and a half years instead of three and a half.
Those associates are likely to be aged around 26 years old. In future, if Goldman hurries people through its analyst programme in two years and then through its associate programme in two and a half years, it might even be possible to make VP by the age of 25.
Goldman declined to comment.
The lucky 26 year-olds who were tapped for ascension will have received a salary hike in the region of £30k ($37k). Figures from London search firm Dartmouth Partners indicate that third year associates earn around £200k in salary, whereas first year VPs earn around £230k. And that's before bonuses.