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Bonus Watch '17: This Valentine's Day, Goldman Sachs Unsubtly Hints That It's Just Not That Into About 100 Bankers

About 100 M&A bankers at 200 West ain't getting shit.

Cold champagne sweats on the white tablecloth, and fresh oysters glisten in the candlelight. Two dozen roses fill a heart-shaped vase and the petals of their fallen brethren litter the room.


It's Valentine's Day, baby, so you are going all out to show bae who is numero uno in your corazón. And if your lover is anything like Goldman Sachs, you can fully expect to be rewarded handsomely with... maybe literally nothing.

Goldman Sachs Group Inc. didn’t pay 2016 bonuses to about 100 bankers who advise on takeovers and underwrite securities offerings, signaling to a bigger crowd of underperformers that they’re probably better off elsewhere, according to people with knowledge of the matter.

That's the thing about V-Day at 200 West Street; it coincides with the beginning of Culling Season. And at Goldman, there is no hint that your number is up like a bonus check with zeros all over it.

The move is more draconian than in past years when many dealmakers who failed to impress their bosses still got something, said the people, who asked not to be identified discussing the firm’s compensation practices. The number of employees denied a bonus in recent weeks is higher than a year ago -- eliminating what’s typically a major component of their pay.
For bankers and traders at a well-capitalized and profitable firm, getting no bonus is a dreaded scarlet letter -- usually a strong hint that they’re no longer wanted and should start hunting for another job. Around the industry, it’s known as getting “blanked,” or receiving a “goose egg,” a “bagel” or a “doughnut.”

This isn't a Deutsche Bank deal neither. Goldman can give bonuses this year, it just doesn't wanna to these chosen few. Because at The House of Lloyd, bonuses as for closers, not M&A bankers easily replaced by algorithms... Right, Reuters?

Technology whizzes who helped Goldman Sachs eliminate hundreds of trading jobs over the past few years are venturing into the bank's flagship M&A business, making some junior bankers uneasy.
A team of 75 programmers, internally referred to as "strats," has been developing technology to make Goldman's elite dealmakers more productive. That team within investment banking has doubled in size since 2014, when long time tech banker George Lee was appointed chief information officer for the investment banking division.
Programmers are now supporting those handling equity underwriting, leveraged buyouts and deals within the financial services and real estate sectors. They are also analyzing client data to offer better advice on deal targets and types of actions that might please a particular company’s investor base.

Algos are cheaper, less likely to fall into a moral abyss, and almost never leave you for a job in the Trump administration.

Plus, not paying the poor-performing deal jockeys allows Goldman to do what Goldman does best; concentrate the wealth.

Goldman Sachs typically places staff into one of five performance tiers, known as quintiles, during its annual performance reviews. Members of the lowest quintile, the bottom 20 percent, missed a bonus this year -- though most were spared, the people said.
Management determined it needed to reward top performers, and took bonuses away from less productive workers to control overall compensation costs, two people said. The bank’s compensation ratio, which compares pay to revenue, rose to 38.1 percent for 2016 from 37.5 percent in the prior year.

Happy Valentine's Day, indeed.

Goldman Sachs Denies Bonuses for 100 Investment Bankers [Bloomberg]
Geeks venture into Goldman Sachs' world of big deals and egos [Reuters]


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