Morning Coffee: Goldman Sachs MD wisely didn't resign over non-promotion. Jefferies “builder, not a fireman” is gone
A famous football manager once said that his main job every week was to keep eleven players happy. Specifically, he had to spend his time watching the feelings of the eleven players in the reserve team; the first team were all happy anyway because they’d been picked for the first team.
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A similar proverb might be applicable to Goldman Sachs – famously, every two years the headhunters circle round, looking for managing directors who weren’t promoted to partner, but who think that they should have been, and who might be persuaded to turn their disgruntlement into a job move. But if you ever find yourself with this most rarified of champagne problems, it might be worth considering the example of Asahi Pompey.
Pompey was left out of the 2016 round of partner promotions, despite having reached the post of chief compliance officer after ten years at the firm. And she was also tempted to “throw my toys out of the pram”, having done exactly that a decade earlier at Pfizer, when she resigned after not getting a promotion she felt she’d deserved.
But luckily, her colleagues gathered around and told her to try again; she was also going through a divorce at the time, and felt that it would be a bad idea to start stacking up stressful life events. And then in 2018, she finally got the phone call from John Waldron.
Not only that, but shortly afterward, she was promoted to join the Management Committee, which is in many ways a partnership within the partnership, and which people have also been known to get a little temperamental when excluded from. She’s now global head of corporate engagement, president of the Goldman Sachs Foundation and recently added chair of the Urban Investment Group to her portfolio of prestigious titles. It seems pretty safe to say that she’s glad she stayed.
Is this always the right policy? It depends. The strong temptation would be to say that if you’ve reached the rank of managing director at Goldman Sachs, you’ve probably got what it takes to get to the highest levels, and if you’re passed over for partner once, it might just be bad luck, being in the wrong business unit at the wrong time. If it happens more than once, though, it’s likely that you’re hitting an obstacle in the famous “cross-ruffing” process. That would mean that a material number of the existing partners either don’t’ rate your skills so highly, or just don’t like you.
The problem then is that only a very few buy-side jobs in hedge funds or private equity might be able to match the $950k basic salary, eight figure bonus potential and investment perks of the GS partnership. If you’re able to walk into one of those, fair enough. But otherwise, if you’re seriously considering resigning in a fit of pique, that might be evidence that the committee had it right that you weren’t really suitable to be a partner anyway.
Elsewhere, one of the signature hires of the period in which Jefferies added dozens of Managing Directors was Alejandro Pryzgoda. He was recruited from a pre-crisis Credit Suisse to become co-head of global investment banking in 2021, quickly brought over his FIG colleague Armando Rubio-Alvarez, and was soon giving interviews saying things like “I’m spending 100% of my day building. Whether it’s doing a deal or adding a senior banker to our team. It’s just building. I don’t spend my day solving fire drills. I’m not a fireman. I’m a builder”.
And now he’s leaving the bank. There aren’t many details available yet, so we don’t know if he’s doing so in circumstances where he keeps his compensation, or whether he’s going to receive one of Jefferies’ notorious clawback letters. But either way, it feels like the end of an era. Andrea Lee, who presumably now becomes sole head of both global investment banking and Jefferies’ financial institution group, is Pryzgoda’s diametric opposite in career terms – she’s a twenty-year veteran of the bank.
Meanwhile …
David Solomon is ending the year on an optimistic note. As well as praising Donald Trump’s “growthy” economic policies, he thinks that deal revenue in 2025 will “certainly be at ten year averages” and might even be higher. (Reuters)
Goldman CFO Denis Coleman doesn’t seem to be suggesting that this is going to drive another hiring boom, though. He’s giving some detailed comments on how the use of AI tools is improving productivity per head among Goldman bankers, and continuing to emphasise the 60% cost/income ratio target. But he also says that there is a process of “taking a look at the entire setup of the firm from a human capital perspective, where do we look from a location perspective, how do our pyramids look”, which suggests that redundancies, if any, will not be in the front office. (Seeking Alpha)
JPMorgan is also expecting strong revenues, with fees up as much as 45% for Q4 (Reuters)
“Stay confident in what you bring to the table, but humble enough to recognize areas where you can grow”. And “ultimately it is people who will make all the difference”. If you want extremely generic career advice, five newly promoted MDs at Citi have some. (Business Insider)
Understandably, there’s only one topic of conversation at sell-side healthcare conferences at the moment. The Evercore conference added more security when it heard the news of Brian Thompson’s shooting. (Bloomberg)
If you’re a consultant, but don’t have any clients, then you’re just “an old person with opinions”. Some useful advice for any bankers who feel like there’s a gap between their planned retirement and their pension savings, and who want to bridge it with a consulting business. (WSJ)
The work-at-home model is bad for the apprenticeship and training of accountants, and might cause issues with the quality of audits, according to their US regulator. Of course the problem is that there is a crisis in recruiting people to work as auditors at all, and back-to-office mandates won’t help. (FT)
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