Morning Coffee: Goldman Sachs summons long lost partner in hour of need. Deutsche Bank says it's hiring cheaply
It's been a while, but Tom Montag - whose Hawaiian holiday from Bank of America unexpected segued into his retirement two years ago, is coming back. Sixteen years after he left Goldman Sachs as a partner, Montag is galloping back to the firm as a member of the board.
He's been summoned by David Solomon, Goldman Sachs' CEO who was himself last seen smiling on the London tube, but who's been having some issues by virtue of the tepid revenues from the consumer bank, incoming large writedowns on his 2021 purchase and then sale of fintech lender Greensky, and his partiality for the company private jet. Solomon and Montag are friends: they worked together at Goldman back in the day. In the years preceding the financial crisis, one was co-head of the investment bank and the other ran the securities division.
There are solid reasons for Montag to mount the board at Solomon's behest. Montag knows Goldman. He is a markets man; Goldman has a big markets business that could benefit from Montag's wisdom. Goldman's board is also looking depleted at 12 people after two directors resigned in April. Solomon, who is Goldman Sachs' CEO and chairman, hasn't named anyone to the board before.
For Montag, who made a small fortune working for Goldman, from being a partner when Goldman went public, and from then from being one of the biggest dogs at Bank of America over a 13-year period, the appeal of the board role presumably extends beyond its pay. He gets to work with his pal, Solomon, in a perch a notch up from where his Goldman career ended. When Montag left Goldman in 2007, it was reportedly because two younger people - Gary Cohn and Jon Winkelried - were promoted above him by then CEO-Lloyd Blankfein. Cohn, Winkelreid and Blankfein have all since disappeared. Montag, who had already been seen frequenting Goldman partner parties during Solomon's reign, now has a clear sight of his kingdom.
And yet, while Tom's return may be good for Tom and good for David, there are some suggestions that it might not be so good for other people working for Goldman Sachs. When Montag left Bank of America, it was under something of a cloud following a series of critical articles in the New York Times. Among other things, Montag was accused of partiality, of arbitrary bonus allocations, of creating a culture in which women were objectified, and of an old school approach when it came to expecting people in the office.
That was two years ago. Given that most banks expect people in the office now, at least one of those criticisms has lost its sting. Montag's return might be a good thing; it could even put Goldman back in touch with other lost talent - Sanaz Zaimi still seems to be out of the market.
Separately, Deutche Bank has been hiring enthusiastically this year, but anyone concerned that it's been overcome by exuberance should be reassured. Speaking to Financial News, Fabrizio Campelli, head of Deutsche's corporate and investment bank, said that after its 50 banker hires this year, Deutsche's recruitment is nearly done. People have been cheap, said Campelli: “We managed to attract 50 new hires at terms that were particularly attractive compared to the challenge of taking on that talent two or three years ago.”
Deutsche therefore took this opportunity to move its business away from leveraged finance. It doesn't want to find itself "over-hiring when the market has contracted."
Meanwhile...
After cutting 2% of its staff in February, KPMG's US business is cutting another 5% of its staff now. Consulting business has slowed down and no one is leaving of their own accord. (Financial Times)
Robinhood is cutting 7% of its staff in order to “adjust to volumes and to better align team structures.” (Wall Street Journal)
JPMorgan needs a board member after 70-year-old Jim Crown died in an accident on the weekend. (Yahoo)
More about Citi's attempt to monitor employees in the office: “One swipe per person, per day, per location will be captured. The number of hours spent in the office will not be captured in these reports. The focus of the reporting will be on employees with consistent office absence. Reports may then be shared with managers as appropriate to prompt further discussion.” (Bloomberg)
Jefferies hired Sven Baumann from Barclays as head of investment banking for Germany, Austria and Switzerland. (Bloomberg)
Torsten Schöneborn joined Barclays from BNP Paribas as co-head of G-10 FX trading. (Financial News)
HSBC is leaving Canary Wharf for a smaller office that used to belong to BT near St Paul's. (Bloomberg)
The chief executive of the London Stock Exchange unintentionally told her MD while she was at JPMorgan she was gay when coming round from an operation: "I thought she was coming to check I was actually ill, but she was coming to see that I was OK. I introduced her to my partner who was beside me. Three days later when the morphine wore off, I realised I had outed myself.” (Financial Times)
Mizuho is giving all its Japanese staff access to generative AI. (Bloomberg)
If you offer an employee a one-month sabbatical, they will never go. "I don't see myself leaving Bank of America ever. I joke with my manager all the time that I'm not going to leave — but I know that if opportunities or promotions within Bank of America come up, that I can jump at them and take them. But I want to retire with this company. I have a colleague who's hitting 43 years with Bank of America right now. I want to be one of those. (Benefit News)
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