Morning Coffee: This is what happens to bankers in their mid-50s. And officially, banking’s most insane commute
“You are old and set in your ways” – not a phrase you want to hear at any time, but coming from the boss telling you that you’ve been laid off, it would be doubly pernicious. It must have rankled even more for Niels Kirk, because at the time he was let go from Citigroup, he himself was 55 and the boss who said it, Manolo Falco, was 54.
Mr Falco denies having said anything of the sort. This is worth noting, because in UK employment law, employment tribunal awards are capped at £84k ($111k) unless discrimination can be proved, and age is a protected characteristic. A straightforwardly discriminatory statement like that might therefore be a silver lining to a redundancy cloud, and any lawyer is likely to make the most of it.
We haven’t heard Falco and Citigroup’s side of the story yet, but Kirk, who spent 26 years working for Citi and was latterly chairman of the EMEA energy and natural resources group paints a picture of a straightforward attempt to get rid of him as he moved beyond his early 50s.
Aged 52 in 2014, Kirk was being rated as 1’ (the top category) and earning just under a million pounds. This fell to a rating of ‘3 for the next two bonus years with his compensation nearly halving. Mr Kirk notes that Gilles Graham, Citi’s FIG chairman, also sued in 2016 for age discrimination and named Manolo Falco in the lawsuit; on the other hand, this case was withdrawn.
Whatever the eventual result, this case underlines the fact that for a senior IBD banker, the early fifties can be the peak earning years. After working through the associate and analyst programs in your twenties, climbing through the Vice President and Director ranks in your thirties and finally reaching the MD ranks in your early to mid forties, you arrive in a position where you’re expected to win business that is identifiably your own. As you approach the end of your first decade at the top, you’re likely to either have made progress into senior management, or to be cementing your status among the ranks of “rainmakers”.
Unfortunately, this is also when you might be vulnerable. People at this stage in their career are expensive. If you’re at a level where seven figures of total comp has become your baseline, then management will be keen to ensure you’re still bringing in the revenue. Burnout does happen; in any given class of fifty-something MDs, there will be several whose performance is affected by a combination of the cumulative stress of the job, health and lifestyle issues and the simple fact that it’s not always easy to stay focused on further success when you’ve had a few years of big paydays.
‘Losing your edge’ isn’t a protected characteristic. Nor is, ‘not being hungry any more.’ In order to win a discrimination case, you need to prove that the boss is specifically prejudiced against people who are (in this particular case) a single year older than they are themselves for their age. In a couple of weeks we’ll find out whether it happened at Citi.
Elsewhere, in a profile of former investment banker and current Brexit schemer Sir Oliver Letwin MP, we learn that back in the day, he worked on a contract for Rothschild in New Zealand and “commuted there on a weekly basis”. Which raises two key questions – how? And why?
Even today, London to Auckland is a 24 hour flight, and depending on the stopovers made, can be as much as twice that. “Commuting weekly” can’t have meant working Monday to Friday then popping back for the weekend; there simply wouldn’t have been time. So presumably Mr Letwin (he hadn’t been knighted then) was under some sort of one-week-on, one-week-off arrangement, like an oil rig worker.
Even that is a lot of flying though – a friend claims that he was ‘British Airways’ best customer that year,’ and indeed the Airmiles would have piled up in size with regular business class flights. But a senior Rothschild banker could usually expect to get Platinum status without putting his body through that kind of punishment. It’s likely that Oliver Letwin just wanted to get back to his own bed. There comes a point in every banker’s career when international travel loses its appeal; basically, every year your house gets nicer, but the downtown Marriott stays roughly the same.
Lloyd’s of London have reacted to the Bloomberg expose of their drinking culture and persistent harassment issues by setting up a hotline and unveiling new disciplinary procedures, including the possibility of a lifetime ban from the market. (Bloomberg)
It might not be glamorous, but it seems to be succeeding; David Solomon’s plan to expand the Goldman franchise into the Midwest and into smaller companies has been cited as nearly complete in the latest shareholder letter. (Financial News)
Two verdicts from the Barclays Euribor-rigging trial – Carlo Palombo was found guilty while Sisse Bohart was acquitted. It seems like hard luck for Palombo, who had left the industry to do a philosophy degree and is starting a family. Colin Bermingham, whose defence is partly that he was unpopular with his colleagues and not invited to their chatroom, will receive his verdict tomorrow (Reuters)
In a low interest rate environment, Global Transaction Banking is a bit of a Cinderella business unit for Deutsche Bank, but it’s still a key franchise, as shown by the recent decision to post Ole Matthiesen, a senior MD in FX structuring to its head. The former head of GTB will be going over to the investment bank to sell treasury services to corporate clients (Euromoney)
JP Morgan has agreed with the city of New York that the expansions to its head office building are sufficiently significant that the bank needs to make a contribution to upgrading local public transport (Bloomberg)
Harvey Schwartz (who might have succeeded Lloyd Blankfein but didn’t) was apparently offered the CEO post at Wells Fargo but turned it down. He’s still yet to make a Wall Street return (Business Insider)
Advice for women on what to do if you’re paid less than equivalent men. (This would also work as advice for anyone on negotiating a deserved raise.) (The Cut)
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