Morning Coffee: The 30-somethings earning 7 figure salaries for 6 hour days. JPM and GS share vision of bankers' future
You don't have to work as hard as you used to in an investment bank nowadays, but you still have to work hard. An 12 hour day is still standard and while you'll still earn good money for that, it will be less than it was.
Imagine, therefore, if you could work around half as long for around five time as much. - This is what it's like for the most fortunate people in the technology industry.
Business Insider has met up with them. They're known as "rest and vest" millionaires and they have the kind of life bankers waiting for the next weekend can only dream of. The typical R&V millionaire type has sold his/her company to a Facebook or a Google and is hanging about waiting for the Facebook or Google stock they've been paid in return to vest while also collecting a full salary. During this time, they're earning seven figures but are not expected to do much. "My days began at that point at 11, and I took long lunches," says one engineer who sold his company to Microsoft. "They didn't want you to build anything else, because anything you built would be maintained by someone else. But you have to stand by while they bring people up to speed."
While some people in big technology work as hard as bankers these days, there's therefore a rarefied elite who don't do much at all. Some haven't even sold companies. At Microsoft there's reportedly a propensity for bringing top tech people in areas like artificial intelligence onto the payroll simply so they can't be hired by anyone else - they're not necessarily expected to do anything while they're there. Similarly, Google's X unit which researches "moonshots" like life extension therapies and glucose monitoring contact lenses has a reputation for highly remunerated dossing on salaries raising from $250k to $500k with no strict deliverables.
As with all the other best things, however, the easy life at some tech firms may be about to come to an end. At Google X, an ex-banker is pulling the plug. Ruth Porat, the current CFO of Alphabet, Google's parent company, and a former M&A banker and CFO at Morgan Stanley, is reportedly preparing to curtail funding to the unit and thereby inject a bit of discipline. This could come as a shock when you're used to earning big money for a six hour day with a yoga session over lunch and a visit to the onsite juice bar mid-afternoon.
Separately, as we noted last week, Goldman Sachs' brave vision for bankers in a world where their jobs have been automated by artificial intelligence seems to involve a lot of travelling. “Instead of working all day on pitch books, our junior bankers can get out on the road, meet with companies and spend more time being students of the markets," said Richard Rivero, head of the team of Goldman Sachs engineers working on the automation of the firm’s investment banking division.
Now, it seems that J.P. Morgan envisages something similar, albeit for sales staff. David Hudson, JPMorgan’s global head of markets execution, told the South China Morning Post that when J.P. Morgan's scary LOXM machine learning trading system is fully launched, J.P. Morgan's existing salespeople will be unchained from their desks. They'll be able to spend more time developing relationships and going about meeting clients face to face, says Hudson. In future, client facing finance professionals will be living out of a suitcase.
In the last quarter, Facebook made $188k per employee; four times more than Google. (Recode)
Paris really wants to be Europe's post-Brexit premier financial location: "We will take the difficult decisions, we will lower French taxes, we will make our country more attractive." (Bloomberg)
Chinese brokerage CLSA made 90 people redundant in February when it pulled out of the U.S. market. They didn't receive any bonuses as they were laid off days before the bonus cheques were due to be issued, and they are not pleased. (Financial Times)
2017 is not going well for hedge fund manager Crispin Odey. His own personal European fund is down 12% so far this year. (WSJ)
“We found managers who say they run a quant fund, but do all the strategy on Excel.” (Bloomberg)
Last weekend Gary Cohn wore a pink shirt and pink cashmere sweater to look at a pink fluffy surfboard. (Bloomberg)
When you've got Bitcoin as your pension fund. “This is like getting to invest in the internet in the ’90s. I’m obviously very bullish, but I expect to make a couple million dollars off very little money. This is the opportunity of a lifetime. Finance is getting its internet.” (NY Times)
Bankers’ pay closely tied to deregulation https://t.co/vwQXf3U47F
-- Just a tiny correlation ! pic.twitter.com/IQ6K76Yn2v
— Pierre Habbard (@habbard) August 7, 2017