Goldman Sachs Partners Put Own (Liquidity) Needs Before Those Of The Firm

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Every fall, previously in the basement of 85 Broad and more recently at 200 West, Goldman Sachs names a class of new partners. Blindfolded and naked, they pledge their devotion to the firm. To commemorate the event, and for the practical purpose of tagging them so their status at the firm can be quickly verified with one quick drop of trou, these newly-made partners have their nether regions dipped in a vat of gold, which harden while Lloyd Blankfein gives a speech about how to carry oneself differently once they reach the upper echelons of GS (literally, as those things will drag if you’re not careful). At the stroke of midnight, as a baby seal barks in the corner, they are inducted into the Brotherhood of the Sach. And while one is more than welcome to benefit, monetarily, from this new position, being a member of the Brotherhood is less about sharing in its huge ass profits than it is making sure the partnership stays long and strong. Some people, apparently, did not read that portion of the fine print.

Goldman Sachs partners have sold $108 million in shares in recent months, driving their total ownership stake in the Wall Street firm down to about 10 percent from 11.2 percent. The sales are a small yet significant dilution of the influence the partners have over the firm. Part of the power of the Goldman partnership is the stake they own collectively, and the agreement they have made to act in unison on shareholder votes. The next annual shareholder meeting has not been set, but it is typically held in May.

And while no one is keeping a list of names....a list is in fact being kept.

The top two sellers in the most recent period were Gregg Felton, a senior executive in the firm’s asset management division, who sold shares amounting to almost $8 million, and Philippe Altuzarra, a banker, who sold shares amounting to about $6 million.

No one should be worried that this going to reflect poorly on them. You are free to sell your shares as you please. And hey, everyone's allowed (one) transgression! Keep it up though and don't be surprised when you're pulled from your desk one unseasonably chilly day next September and placed on a bus headed upstate, to a warehouse in Buffalo. Don't be afraid of the the head of HR will come out of the shadows, wearing an executioner’s mask and swinging massive clippers. It'll all be over soon enough.

Goldman Sachs Partners Sell Shares, Diluting Stake [Dealbook]

Related

Goldman Sachs To Offer More Would-Be Partners Opportunity To Go David Tepper On An Executive's Ass This Year

Each year, after a long and very comprehensive background check, a lucky group of Goldman employees are abducted from their desks, blindfolded, gagged, and led by candlelight through a dark hallway and into a subterranean conference room. Standing on the table before them are Lloyd Blankfein, Gary Cohn and the rest of the management committee, who ask if they are prepared to pledge their devotion to the firm above all else. Those who agree have their nether regions dipped in a vat of gold, genuflect before Cohn's groin, and, at the stroke of midnight, are inducted into the Brotherhood of the Sach. While there are many ways that becoming a member of the club will change one's life, the most important one involves the partaking of astronomical profits on payday. As a result, when people are not invited to join the group, they tend to get very upset. For instance, hedge fund manager David Tepper, who became a billionaire many times over after leaving the firm, was still so upset about the snub twenty years later that he bought and bulldozed the house of the guy who passed him over. Others probably wouldn't have even gone to the trouble of buying the place first, and operated the wrecking ball themselves. Which is why we say in full seriousness that the Partnership Committee might want to watch its back. Goldman Sachs has begun vetting potential new partners and is expected to appoint a smaller number of bankers to its upper echelons this year, according to senior executives involved in the process... The nomination process for new partners ended during the summer. The internal vetting process began earlier this month and is expected to last until mid-November when the new class of partners will be announced. The vetting process is known within the bank as “cross-ruffing”, in reference to a manoeuvre from the card game bridge and typically sees a team of partners deployed to every division to talk to employees who know the candidates. [FT, related]