Goldman Sachs made a not-so-small mountain of money in the second quarter. (JPMorgan Chase, too.) Raking in $5.5 billion is, of course, good news for the Elect. On the other hand, it’s going to make for another awkward conversation re: paying junior mistmakers.
Some senior executives have argued that boosting salaries mid-year would set a “dangerous precedent” and mark a break with the bank’s “pay for performance” mantra, according to people briefed on the discussions.
Yea, um, about that….
Goldman’s investment banking segment posted its second-highest revenue quarter ever, behind the first quarter of 2021, as a booming IPO market boosted its equity underwriting.
Still, there are principles involved, and also maybe the fact that Goldman has rather taken a liking to not paying people Goldman Sachs salaries. On the other hand, Goldman also rather wants to be like everyone else….
Several US banks have recently boosted guaranteed base pay for first-year investment banking analysts, including Citigroup, which last week offered an increase of much as $25,000 to take fixed salaries to $100,000 a year.
JPMorgan Chase and Barclays also lifted comparable salaries to $100,000 from $85,000 at the end of June, while Bank of America and Wells Fargo both gave their first-year intake a $10,000 raise earlier in the year.
“We should not participate in this game of moving salaries up and down every few months,” said one person involved in the discussions. “If you behave like that you simply end up with mercenaries. We pay at the end of the year for performance.”
Nor, as we’ve seen, do D.J. D-Sol & co. plan on compensating employees in other ways.
Citigroup and UBS have said they would adopt hybrid back to work models while Goldman executives, along with their counterparts at Morgan Stanley and JPMorgan, have been more vocal about the importance of employees being in the office.
“Goldman does not want to hire people for whom the most important thing is how many days they have to spend in the office,” one senior manager said. “The others can have them.”
Dinaker Singh is planning to launch a blank-check company. The founder of Axon Capital [and Goldman alum] disclosed that he is seeking to raise at least $150 million for AxonPrime Infrastructure Acquisition Corporation, according to a regulatory filing.
It was June 2020, and [David] Hamamoto, a former Goldman Sachs executive who invested in real estate, was searching for a business to take public through a merger with his shell company. He had raised $250 million from big Wall Street investors including BlackRock, and spent more than a year looking at over 100 potential targets. If he couldn’t close a deal soon, he would have to return the money.
Then, around nine months before his deadline, bankers from Goldman gave Mr. Hamamoto an enticing pitch: Lordstown Motors….
Goldman wrangles over whether to pay junior bankers higher salaries [FT]
JPMorgan Chase and Goldman Sachs start earnings season strong. [NYT]
Goldman’s earnings blow past estimates as investment banking revenue boosted by strong IPO market [CNBC]
JPMorgan tops estimates after posting $2.3 billion boost from better-than-expected loan losses [CNBC]
Ex-Goldman Star Singh Partners With Young VC Firm For New SPAC [II]
Behind the Lordstown Debacle, the Hand of a Wall Street Dealmaker [NYT]