Has Goldman Sachs dropped its standards? The firm itself would undoubtedly argue that it hasn't, but some veteran Goldmanites and people exiting the firm suggest that it has. At issue is the constant inflow of new talent, not all of it (allegedly) up to Goldman's previous standards.
As we noted last month, Goldman Sachs has continued to indulge in some big hiring. Nowhere is it recruiting more feverishly than at executive director (ED) level - one notch below managing director (MD). At least 20 new EDs have been hired since the start of September as Goldman continues last year's strategy of recruiting heavily from outside. Rightly or wrong, the perception in some circles is that Goldman is handing out ED titles like sweets at a child's party.
"Goldman has been hiring the sorts of profiles who don't fit its usual pattern," says one recruiter, speaking off the record. "There's been a general decline in the quality of talent hired into Goldman this year," agrees a Goldman insider. He points to juniorization as senior staff leave areas like electronic trading and suggests that the juniors lining up to join GS aren't the industry's best: "We're not top ranked in research, voice or electronic trading," he says. "The best juniors want to join other banks, or technology companies." Accordingly, one of Goldman's algorithmic traders just joined Google.
Goldman didn't comment for this article, but the firm would undoubtedly point out that the exits from its electronic trading business are just a tiny proportion of the 300 staff who work in the area globally. Nor are its new recruits all EDs. Alongside its executive director hires, the firm has hired-in managing directors like Noel Reyes from J.P. Morgan (head of Americas execution trading product). And some of those new EDs - like Sai Dharmayogan, who joined Goldman in London in August and who previously spent eight years at Citi, latterly as EMEA head of execution strategy and advisory - are highly experienced.
Even so, others among Goldman's new executive directors seem unusually junior. One of the firm's most recent hires is Stefan Djukic, an emerging markets trader who joined in London this month after less than a year and a half at Morgan Stanley and less than two and a half years before that at Barclays. Given that executive directors are very nearly MDs, Djukic is either very talented or very lucky.
The moments of truth for Goldman will come in December 2019 and again in December 2021. This is when the firm next makes it biannual promotions to managing director. Both executive directors who've risen up through Goldman's ranks and the newly hired EDs will hope to be promoted, and many in either group are likely to be disappointed. For the moment, insiders say the new recruits are already making GS a more political place to be. "They've diluted the culture," complains one. "- Management should be investing more heavily in the product instead."
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