[ad_1]
Goldman Sachs executives are struggling with the question of whether they need to raise the salaries of junior investment bankers this year to match Wall Street rivals after younger staff complained burned.
Some senior executives have argued that raising wages in the middle of the year would set a “dangerous precedent” and mark a break with the bank’s “pay-for-performance” mantra, according to people reported on the discussions.
Historically, investment banks have avoided significant inflation in fixed wages, which are more difficult to reduce in fallow periods. Instead, they tend to reward staff with bonuses that can vary drastically from year to year depending on the performance of people and banks in general.
However, several U.S. banks have recently increased guaranteed base pay for first-year investment banking analysts, including Citigroup, which last week offered an increase of up to $ 25,000 to bring fixed salaries to $ 100,000. dollars a year.
JPMorgan Chase and Barclays also raised comparable salaries to $ 100,000, from $ 85,000 in late June, while Bank of America and Wells Fargo gave their first year a $ 10,000 collection earlier this year.
This has left Goldman Sachs as one of the last remaining spots on Wall Street, and started an internal debate about the right course of action.
“We should not participate in this game of wage movements up and down every few months,” said one person involved in the discussions. “If you behave like that, you end up with mercenaries. At the end of the year we pay for the performance ”.
Goldman’s first-year analysts and associates are already earning less than is typical in the industry, according to Wall Street Oasis. The bank’s first-year analysts earn on average just under $ 86,000 in salary plus a $ 37,500 bonus, staying on the Wall Street average of $ 91,400 and $ 39,700, respectively.
Some executives are worried that Goldman risks losing some of its most promising juniors if it can’t match JPMorgan Chase, let alone tech companies like Apple and Google.
Goldman declined to comment.
Investment banking co-chairs James Esposito and Dan Dees have recently discussed the issue at a series of division conferences. They have informed staff that they are monitoring rivals ’wage movements and are aware of the long hours employees worked during the pandemic, when financial markets were exceptionally busy.
The pay year for Goldman’s first-year analysts and associates extends through the end of July and they are gearing up to find out what their pay packages are in August.
Esposito and Dees promised that younger staff would be generously rewarded for reflecting the bank’s growing profits. However, they have not yet addressed the salary issue, which has made the bank one of the last lenders to reach a decision along with Morgan Stanley.
The bank wants to make sure that its emphasis on performance-related compensation is maintained with any salary increase.
“We are still thinking about the division of the base and the bonus,” another person informed about the debate said. “We are seeing what our colleagues have done, not only in investment banking, but in other industries. The war for talent is fiercer than ever.
Staff were told to examine what the bank describes as their “annual full compensation” or “PATC” instead of simply comparing base salaries with those paid to colleagues.
The issue of younger employee exhaustion has become a particular focus of Goldman, following a group of first-year investment banking analysts he spoke on the effect of punishing the hours on his mental health.
David Solomon, CEO of Goldman, has also differentiated the lender by adopting a firm stance against flexible arrangements when branches reopen completely. He called working from home “an aberration that we will correct as soon as possible.”
Citigroup and UBS have said they will adopt hybrid models back to work, while Goldman executives, along with their Morgan Stanley and JPMorgan counterparts, have shown more voice about the importance of employees being in the office.
“Goldman doesn’t want to hire people for whom the most important thing is how many days they have to spend in the office,” a senior executive said. “Others may have them.”
[ad_2]
Source link
