Gorman doesn’t fit the image of a Wall Street titan. Notwithstanding his $10.5 million pay package, he shows up at black-tie events in a rumpled tuxedo he bought as a business- school student in the 1980s. He keeps supplies of Vegemite — a favorite Australian food that’s made from yeast extract — in the executive kitchen and eats it on toast. He often walks home from his Times Square office to his Upper East Side townhouse and was spotted on one weekend in a track suit and sneakers waiting in line at the post office. The 6-foot-3-inch (1.9-meter), 195-pound (88-kilogram) Gorman’s favorite pastimes include reading John le Carre spy novels and taking boxing lessons weekly at his gym…Gorman is the sixth of 10 children born to Melbourne engineer Kevin Gorman. His father, now 90, was home-schooled until age 14 because he lived in the Australian outback, far from any town. Kevin Gorman once had each of his children take an IQ test, James says. He posted the results in the family’s living room, with each child’s score and expected occupation. James, whose sister is now a judge on the Supreme Court of Victoria, came in fifth — a result that relegated him to an expected job of “midlevel bureaucrat or manager,” he recalls. [Bloomberg, earlier]
Morgan Stanley
One More Peep Out Of Morgan Stanley Employees And Next Year’s Bonuses Will Be Determined By IQ Test (Results Posted In Lobby)
By Bess Levin-
Posted in:
favorites
Bet Goldman Sachs Wouldn’t Have Played Favorites. Guess Ya Should’ve Thought Of That Before Relegating Them To Third Place
By Bess Levin
Not sure if the word has gotten out yet, but yesterday afternoon social networking site Facebook filed to go public. Almost as exciting as the news itself (for those who reach self-induced stroke levels of excitement over such things) was the answer to the burning question vis-à-vis which bank would win the coveted and lucrative role of lead bookrunner on the deal. As had been predicted, Morgan Stanley got the job. This happened, we’ve been told, because Morgan Stanley’s “dominant” tech team “has been largely unchanged since the mid-1990′s,” is based in Menlo Park rather than New York, has “seen every tech cycle,” and goes the extra mile to show that beneath their investment banker exteriors beat the hearts of a bunch of guys who really care. When it came to Pandora, which was said to be “wary” of the group, “Michael Grimes, co-head of global tech banking at Morgan Stanley, and his team wore concert T-shirts of their favorite bands from their Pandora profiles, including the Rolling Stones and Black Sabbath, under blue blazers when making their pitch.” In landing the Groupon deal, Grimes and his underlings presumably made sure to note the steal they got on laser hair removal using the site. And, of course, when making the hard sell for LinkedIn and Facebook, the bankers “set up accounts…in a show of support for their prospective clients.” AND YET! It appears only one networking site was granted the ultimate endorsement of Morgan Stanley. Continue reading »
One thing about Facebook is that Facebook doesn’t need the money that Facebook is raising in the Facebook IPO that Facebook just filed. (Did you hear?) It’s got almost $4bn in the bank and it can’t even be bothered to pretend that it’s got any plans for what to do with more:
The principal purposes of our initial public offering are to create a public market for our Class A common stock and thereby enable future access to the public equity markets by us and our employees, obtain additional capital, and facilitate an orderly distribution of shares for the selling stockholders. We intend to use the net proceeds to us from our initial public offering for working capital and other general corporate purposes; however, we do not currently have any specific uses of the net proceeds planned.
And while the selling shareholders undoubtedly will be happy to be able to sell in the open market, they can kind of do that now, with robust SharesPost and SecondMarket trading at high-eleven-figure valuations. Basically Facebook is IPOing because it’s got so many shareholders that it is legally required to register so might as well raise a few yards of rainy-day money while it’s at it.
When that’s your posture – and, to be fair, when people are beating down your door to buy your stock – you can be pretty, pretty cavalier with shareholder rights. What that means here is a two-class share structure (insiders get 10 votes per share, the public gets 1 vote), a board of directors that is not required to be independent, and Mark Zuckerberg controlling 57% of the voting power of the shares (while only owning 28%) via really quite all-encompassing voting agreements with current investors, some of which last until he dies. If your theory of public corporations is “they should be controlled by and for the benefit of the public shareholders,” this may trouble you. If your theory is “I’d follow Mark Zuckerberg anywhere,” then, carry on.
Other things to know or avoid knowing: Continue reading »
How Will Morgan Stanley Be Able To Pay Tech Bankers With A Measly $100mm Facebook IPO Fee?
By Matt Levine
I really hope that Facebook is just faking us all out with this whole “we’re IPO’ing on Wednesday” thing that they haven’t said, in part because I have yet to park $100k of the Dealbreaker slush fund/Bloomberg budget in Facebook shares on SharesPost. But just in case they actually do something next week let’s analyze the hell out of everything so we can be proven wrong by the filings. Okay? Okay.
One thing to over-analyze is that presumptive lead-left bookrunner Morgan Stanley’s shares did or did not go up on the news that Facebook will or will not file next week and MS will or will not be the lead bookrunner. One reason for the market to shrug off this quasi-news is that Morgan Stanley won’t actually make any money on the deal since Faceook is planning to punch everyone in the face on fees: Continue reading »
As you may have heard, bonuses were announced at Morgan Stanley last week and while some employees here and there did okay for themselves, for the most part, people were not pleased with the fact that pay was down, on average by 20-30 percent. In fact, many were downright distraught, particularly among those who received zeros. As these things tend to go, a bunch of people have suggested they’ll be taking their talents elsewhere, where they’ll be appreciated and, at the very least, have made a point of sighing audibly around the office to express their disappointment. By now, though, hopefully everyone’s gotten everything out of their systems because one person who’s no longer interested in hearing it? James Gorman. The Morgan Stanley CEO appeared on Bloomberg TV this afternoon to get a few things off his chest and among them: 1) Those complaining should consider waking the fuck up 2) If you let money define your happiness, he feels sorry for you and 3) “If you are really unhappy, just leave.” Seriously, get the hell out here. Continue reading »
Which apparently represents a 9.5% drop from last year and “the lowest number of employees it promoted to that role since 2008,” lest anyone think Jim Gorman is fucking around. The era of cannolis and promotion free-for-alls is over. [WSJ, full list]
How Is The Whole “Don’t Risk All Your Money Trading For Your Own Account” Thing Working Out For US Investment Banks?
By Matt LevineAll the big banks have reported earnings so let’s take a little stock of things, shall we? A thing I did midyear was look at the ratio of trading net revenues to VaR for GS and MS, to prove that MS was winning the trading or something. Let’s expand that a bit. The result is, I think, an interesting chart:
The interpretation you could put on this is “this is how much money GS/MS/JPM/BAC made on an average trading day for every dollar of capital that they said they had at risk on that day.” Technically, this is is a graph, quarterly from 1Q2006, of [Trading Net Revenue / (Average Daily VaR * Trading Days in Quarter)], for four banks. Go read caveats here.*
This is obviously a toy chart, and too aggregated/undersampled to tell you all you might want to know, but still kind of fun. Continue reading »
The good news: the waiting– which is the hardest part!– is over. The bad news: this year’s bonuses. Continue reading »
Last week’s cuts are still a’ coming. Continue reading »
The bad news: if all goes according to plan, bonus numbers, which will be communicated over the next couple weeks, will have you weeping unconsolably at your desk, shrieking “No! Get away from me!” at worried colleagues approaching to offer comfort. The good news: assuming you don’t get fired for wiping said tears on Gary Cohn’s pant leg when he comes by for a chat, there’s nowhere to go from here but up. Continue reading »
The aforementioned cuts have begun at the House o’ Gorman. Continue reading »
