Goldman employees who make the cut usually get a personal call from CEO Lloyd Blankfein (pictured) or CFO Gary Cohn
In late afternoon UK time, the US bank will publish its newest list of partners. The title carries near-mythical status and the biennial promotion round is closely watched on Wall Street and in financial circles around the world.
The bank promoted 78 in the 2014 round but, according to its 2015 annual report, its ranks of partners and managing directors declined 2% last year.
FN has dedicated plenty of coverage to the promotions and careers of Goldman’s partners over the years, both at the bank and beyond. So, ahead of the 2016 list, here’s a reminder of how the bank’s executives get there and what happens when they do.
Career progression at GS
This broadly follows a typical path. The best entry-level analysts will rise to associates in around three years or leave the bank (voluntarily or otherwise). Another successful three years or so at associate level means a promotion to executive director or vice-president. The cream of the ED/VP crop go on to take on managing director roles – one rung on the career ladder beneath partner.
Goldman’s MDs – of which there are more than 2,000 – are high-caliber bankers, fund managers and traders but the step up to partner is no given, even for those doing well. There is no limit to the amount of time an MD will stay at this level and many will get passed over in promotion rounds before either a) getting the call from CEO Lloyd Blankfein or CFO Gary Cohn, or b) eventually moving on from the bank.
Richard Hoar, a director at headhunter Goodman Masson, said: “Someone who’s been passed over once, many will stay and give it another go if the message has been delivered to them that it’s obtainable. But if that door looks like it’s being closed some may look for pastures new.”
Those that make the cut get judged on more than their money-making credentials. They need top-notch managerial skills and must demonstrate a commitment to the bank’s culture and values. You can watch Edith Cooper, Goldman’s global head of human capital management, talk through the process here.
For those that do make it…
Life at the top
Michael Sherwood, co-chief executive of Goldman Sachs International, told FN in 2012: “Part of being a partner is putting your own personal ambitions behind the ambitions of the firm, especially in difficult years.”
Goldman went public in 1999, meaning its partners were no longer on the hook for losses as before. Nevertheless, the bank took steps to maintain its partnership culture and for some, including former operating chief Glenn Earle, doing so was key to securing internal backing for the float.
Being one of the more than 400 Goldman partners today means holding a title still considered to be among the most coveted in finance. Hoar said: “They [partners] are stratospherically above any other grouping of employees within investment banking in terms of potential financial rewards and kudos.”
The financial benefits mean partners are able to share in the bank’s special partnership compensation pool. But there are other perks too; Goldman has run annual dinners for existing and former partners to keep the network going and, as one former partner previously told FN, a password-protected website providing specific pieces of equity research.
This is all commensurate with the commitments, which are not for everyone. One former Goldman partner told FN in 2012 that he left the bank to join a rival because he couldn’t find the time to attend to the needs of his family.
After the partnership
For Goldman partners who leave, there’ll be no shortage of opportunities in finance and elsewhere. Former Goldman partners now run some of the world’s biggest financial companies, or hold top positions within them. Among their number is Carsten Kengeter, the CEO of Germany’s Deutsche Börse who is currently negotiating a merger with the London Stock Exchange – led by another Goldman alumnus (though not a former partner) Xavier Rolet. Others include bond giant Pimco’s chief executive Emmanuel Roman and HSBC’s co-head of banking Matthew Westerman.
In politics, Goldman’s old CEO Hank Paulson went on to become US Secretary of the Treasury under George W Bush, while Mario Draghi is president of the European Central Bank. And then there’s Gary Gensler, a former member of Bill Clinton’s administration and ex-chairman of the Commodity Futures Trading Commission.